Futures are down a thousand and Asia is having their balls chopped off, which is child’s play in comparison to what’s in store for me tomorrow morning with my XIV position.
Just a few days ago, I cockily sashayed into the position, promising great fortune to my great, great grandchildren — profiting from the total breakdown in volatility — which has been a given for the past decade — until now.
Starting rather immediately, both SVXY and XIV will trade directly to zero. DO NOT PASS GO!
Why?
Any fucking questions?
We played the game in a funhouse of mirrors beset by fiendish clowns and leave with nothing at all — not even our pants. It’s actually poetic to get blown the fuck out in an ETN that has done nothing but trend higher for a decade. Going into Friday’s tape, XIV had a Sharpe ratio of 1.81, which is insanely strong — indicative of a product that doesn’t really shift in standard deviation. It was a simple product, the farmer of the ETF world. And now it’s dead — triggered by a clause that maybe 1% of buyers bothered to research. There is a lesson in here, tucked away deep under all of this chicanery. I am sure Credit Suisse will just redeem the product and issue a new one next week — maybe even under the same ticker symbol.
Last week I featured a chap named Carlos who got wiped the fuck out in Bitconnect. We’re all Carlos now. Watch this video and simply replace the word “Bitconnect” with “XIV” and you’ll know exactly what I looked like last week.
My gameplay for tomorrow is simple: enter the hellscape with guns blazing, sell out of my SOXS position for a quick profit, lick my wounds with XIV, contain losses with other retard positions, allocate cash into something that is going to fucking rip heads off to the upside whenever the market turns higher again.
Futures are chopping dicks off to the downside right now — down by 1,200. European markets, more or less, off by 7%. Asia: fucked. Bitcoin: a memory. A Devil Dog moment fast approaches.
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Lost about 2/3rds of my IRA today in XIV.
However, I’m strangely calm about it all, which I don’t understand.
I’ve been trading it all year, well before Fly started talking about it. Actually, last year was my best trading year ever. Mainly because of XIV.
Damn, for a while there I thought I was a genius.
Now, it looks like everything and more will be called back.
I wonder what happens IF it gets sorted out tomorrow.. it’s still XIV. You’d still own shares. 3 years from now this is a distant memory.
Just see algo trading causing a lot of this. This feels nothing at all like 09. No panic. No people saying the world is ending. For all we know, algo sees a flurry of buys and it’s back. I don’t know.
If I was 2/3 down.. I’m not sure what I’d do. But I recall people selling at the bottom of 09 wishing to God they’d just closed the browser and eaten another sammich.
Is there any way you hold.. the symbol is the same. This all sorts itself out.. and volatility dies?
Since 09 the # of hateful comments and massive massive spikes in VIX all end up being another leg up after all the weak hands fold or bots sell or whatever.
Anyone shaking-their-finger-at-me,
I said throughout, you are becoming pavlov conditioned,
Hard to claim that’s not what led to your entrapment
in XIV, if you happened to be one of, them
XIV and SVXY simply behave badly close to termination, amplifying incremental changes of the underlying futures into large percent changes relative to the already small value that remains in XIV and SVXY.
A trader cannot rely on XIV or SVXY to maintain a short volatility position through such a volatility event, and must resort to other ETPs and derivatives.
Really sorry to hear that.
Do you think the same thing will happen to SVXY even though it does not have the same termination clause as XIV?
Well it’s down 80% in AHs, so it’s a moot topic, no?
My point was it looks like XIV has a forced termination trigger whereas SVXY does not. So XIV could close but SVXY could still trade back up if the VIX normalizes.
All the volatility based ones do, since they can technically go negative
They both have a positive NAV right now. They aren’t obligated to terminate it unless it’s at zero. Try to open, or fight a huge class action due to after hours price discrepancy? I’d guess they’ll at least try to open if the NAV is positive.
Do you guys see how truthtellers are often correct in the midst of seeming Collosally Mistaken?
the cliches being said pertinent to genius easy trades and no consequences
Now that the VIX futures front month is trading near 30, it will take
a much more extreme event to trigger termination of an inverse instrument
like XIV.
XIV, SVXY, XIVH, ZIV. At this point, my mindset is to look for survivors.
Though if it existed, what I’d prefer in a XIV-like product today is a half-levered
inverse volatility ETP that copes with dramatic days with lower drawdown and
lower risk of termination than XIV or SVXY. Who will create such a product?
Long term, I’d prefer an ETP that gains 100% and occasionally loses 50% over one that gains 300% and occasionally loses 100%.
“what I’d prefer in a XIV-like product today is a half-levered
inverse volatility ETP ”
Easy as pie, but takes minimal discipline. If you want to put 10% of your portfolio in such a product, just put 5% in cash and 5% in XIV (or equivalent) and rebalance the two.
– XIV goes up 300% -> your Vol pie goes up 150%, your account 15%
– XIV goes down 100% -> your Vol pie goes down 50%, your account -5%
That line of thought, just allocate 50%, may be part of the reason no one has bothered to create an inverse volatility ETP with half leverage.
Yet it’s not so simple as cutting the position in half.
XIV includes a built-in stop. A 50% spike in the last fifteen minutes can trigger termination and lock in the loss. Additionally, XIV cannot be used to rebalance the position after a 100% surge in the underlying futures.
Unfortunately, most of my losses with XIV occurred on the rebalance. Due to the poor choice of XIV for the scenario that unfolded, my account suffers a large loss rather than enjoying profits today. Now I see the value of half-leverage for a hypothetical inverse volatility ETP that follows the same underlying futures as XIV and SVXY.
Today the strongest inverse VIX volatility ETP is ZIV, simply due to the muted response of the 4/5/6/7 month VIX futures. At the close ZIV is still up 45% since the open of 2017.
How about saying ‘thank you’ to that filthy yeast infested (((cunt))) Yellen.
https://tinyurl.com/yc4badra
but hey, don’t say you didn’t know…
Yellen was a cog in a very large wheel. I don’t believe in scapegoats and I do not believe that I am without recourse to outsmart others. I got fucked on this one, but I’ll recover.
We have bad (((actors))) manipulating markets, rates, commodities, etc. at will and their pleasure. Ron Paul is the one who opened my eyes how to outsmart these satanically possessed villains. I try not to over think it after I got fucked by dotcom. Irrational and exuberant markets my ass. Each and every au/ag ounce is leveraged at least 100x in paper derivatives. And dumb goyim still play (((their))) “pet rock” game and short it instead of getting their hands on every ounce they can get. PM are still on sale. But that’s just me. It’s not for everybody. We all do what we can. My 2cents.
You will eventually be right. It’s just math and in the end, math will win out.
It’s already coming to end. One more time the system will be flooded with confetti to boost markets to all-time-high, it’ll look like Venezuela, Zimbabwe and the big war will start and will be blamed for the demolition and impoverishment of humanity. All wars are banksters’ wars. Hang banksters, take the power to create credit ex nihilo from them and no more big wars, just innocent local skirmishes because all parties will run out of sound money very quickly.
and this of course is satire
https://tinyurl.com/y7wwlasl
I have nothing but respect for The Fly…and I feel deeply for him losing his ass in $XIV.
He warned me off the $VIX a year ago, saying it was a fools game, only for knuckle-dragging baboons.
So, I must say that after getting my own balls cut off for months and months, speculating on the $VIX….only for it to explode to the upside today….is rather comforting.
There should be a government bailout of $XIV holders. After all, they did it for the bankers.
I wish no ill will…even on those who entered these products unaware of the termination clause, or what a 100% move in a 100% short fund would mean. I’ve been exactly here shorting TVIX into a 900% ramp.
IF (big if) they can open these fuckers tomorrow, you should be in the clear. It would require another daily 100% futures spike, which would be extraordinarily unlikely at elevated VIX levels.
Theres plenty of data out there that shows in 2009 XIV would’ve lost 95%…and subsequently made it all back. It’ll probably take years…but they will come back.
I should clarify, so it’s absolutely clear. If they can survive tomorrow, it would require another DAILY 100% spike in the VIX futures. They reset every day, so it doesn’t matter if we get multiple 50% daily spikes. It’s gotta be 100% in one day.
As much as they are down, after hours spread was pretty tight…meaning market makers were involved…meaning they’re probably gonna try to open them.
Dude, you don’t get it, although your second post was closer.
Vol futures: 15->28.5 +80%; XIV goes -80%, from 115->23
Vol futures: 27->15 -44%; XIV goes +44% 23-> 33
So that’s a 72% loss. So even if it doesn’t close and VOL resets to Friday levels, it is still a huge loss.
If we are talking 96% loss, then full Vol recovery would lead to a ~92% 2-day loss.
XIV is literally desigend to go to 0 and is only good to catch short moves.
Let’s say you went the other way first:
Vol futures: 30 -> 15, -50%; XIV goes +50%, from 100 -> 150
Vol futures: 15 -> 28.5 +80%; XIV goes -80% 150 -> 30
BTW, this is an issue with MOST ETNs, and many ETFs in which the underlying assets are options and futures.
Like I said…it would’ve made it back in 2008/2009.
https://sixfigureinvesting.com/2011/08/xiv-during-the-2008-crash/
It would take years and years of positive roll yield, assuming a similar event doesn’t happen again.
Guess it’s moot now. Maybe SVXY will end up attempting such a rally.
Muh.Crocodile tears. You still trade like an imbecile. For your glorious performance your wife should hit you in the face with a cast iron pan and your dog shit on your favorite pillow.
For anyone who follows them; NYMO closed at -118, Fear and Greed indicator is at 17. Both are multi year extremes. And the nasdaq futures are stiffening a little
put order in to buy 2k shares after hours well below close price at $75 never thinking I would get filled… it did I’m busted. I won’t lie I am sick to my stomach and wondering wtf happened.
Come on Contagion
Come on Contagion
Come on Contagion
you still are not getting it. equities will go much much higher with the flood of confetti…venezuela, zimbabwe, argentina, … why is so difficult to see it for you? this aint what you are hoping for. We need to get a war going first.
You can put today’s action in the, “even when I win, I lose” file.
The Nassim Taleb fat tails market returneth.
I say buy vix puts on the gap up tomorrow. Make your money back within a week
Wow, you really have never traded VIX options before have you? Do you know what European-style expiration means and how that affect pricing?
I once traded a VIX calendar option spread, long the near month, short the further month for a net credit (the long was worth less than the short). I later closed the position for *another* net credit (the short was worth less than the long). I got paid to take the trade, and paid again to close it out for a mathematical *infinite* gain. Do know what I learned? Not to trade products I don’t understand well enough.
You guys still thinking this is the time to go long…*smh*
Great Bitconnect EDM Remix, Fly. Thanks.
If you can afford to, better to watch right now. I dumped my junk Thursday and Friday, except for some calls and XIV which cost me about 4% on top of the rest. I’m about 65% invested, before the crash. Biggest position is an international ETF. Futs trying to go green. Yippee.
Got some sell orders filled at YM 24100. Set up a list of sell orders every 50 points above it to 25000 and will leave them there until 100 points of profit.
Well, that’s quick.
It quickens the blood, Mr. Fly. I will be joining you in treading into this blasted landscape to buy. The apocalyptic whirlwinds will no doubt come to claim our souls and everything we own someday, but that’s not how one should bet.
Sorry Flyseph.
You been through this before, and came out of it chopping dicks off.
Best,
Wood
Forced Complacency is a bitch.