ProShares Ultra VIX Short-Term Futures ETF
Now back to pre-2020 lvls. Current account value:~30k. Peak:~150k. This is 1 account of 5 I manage. I switched it from ETFs & Lg-cap growth to mix-cap hyper-growth and options in 2020. Timed ‘20 bottom w/calls on UVXY. ~6k->~65k. Bought a new 35k 🚙 in cash.trade wkly.Accumulating cash at main job.
Well I haven't personally traded UVXY puts, but according to [Positional Option Trading](https://www.amazon.com/Positional-Option-Trading-Wiley/dp/1119583519?&_encoding=UTF8&tag=thetatitans-20&linkCode=ur2&linkId=70ad9782f307a00e6197f5bf84596fa4&camp=1789&creative=9325), those options could be worth more than a genie's lamp in 2 years. Just make sure to hold on tight during those reverse splits!
Learning the best way to short has been an ongoing process. UVXY can 12x or better in a month. So you have to protect yourself. But yes.. I've just continued to average in. I will short and then when that cuts in half or so I short to the original investment size.
There are several strategy to trade VIX, I think sell VIX option should be only 20 %, in you case that will be 20K , the is 10 contracts, another 30K ~40K should trade when VIX spike , at the time you can Short UVXY with call options protect if there is shares available to borrow, or you can buy SVIX a with put option protection. You can start to short gradually not in one time , be patient. I personally like to sell call spread on UVXY with 10 to 20 % of my portfolio, that will be 5% / month. always keep 40% available in the account. 60% risk is all you take. When extremely case happen , you will be very happy you still have enough money to short VIX, the will bring you great return in few days. Good Luck
No offense taken. VIX ----> Vix futures ----> UVXY. Just because UVXY is indirectly related, doesn't mean it is NOT related. I've been shorting UVXY since split adjusted $4800/share. I wouldn't get caught dead going long. I'm pretty straight on how it works.
As someone who actually studied 8 years in this with some years having heavy miserable focus on this retched topic, I suggest you study up and stop trading till you learn more. No offense. Due to UVXY suffering from convergence, the longer you hold it the less it tracks the market. For 30 days post split, uvxy can be used for i/d and weekly insurance. After that it loses its connection. It was basically made to drain money from the uneducated retail haha. Saying that VIX and uvxy are the same is like saying spxs and uvxy are the same. Just because uvxy is an v/i doesn’t mean they share anything in common.
UVXY is specifical tax forms like K-9 issuance which complicated the tax return and after dealing with this last year, i dont find it worth the time But if you dont have to (i.e non resident alien who's not filing tax to US), my take home lesson was Buy 25% of 1 lot of 100 shares. Sell naked call (75% naked call). Collect premium If UVXY goes up, start cover with collar strategy with the same ratios (buy 100 shares/sell another 5-10% movement call options to collect premium, which will still result in 75% naked call sold/buy put options as UVXY eventually goes down) If UVXY doesn't go up, (which is most of the case) then enjoy premium and ready for rainy days (i.e when UVXY spiked, you wanna buy put option to protect after you cover) Rinse and repeat It's hybrid strategy of collar and butterfly Its one of the ideas and i prefer 1;3 ratios between shares and sold naked calls (i.e 100 shares and sell 3 OTM strike around 20-30 delta) The big point you wanna make sure is contango. I forgot the schedule but UVXY gets reverse stocks in every 3-4 months so make sure to sell before this schedule to avoid liquidity issue (one that i learned from my mistake)
Do you trade volatility? UVXY and the VIX are absolutely related. Saying they're not related is a complete misrepresentation of the volatility market. While they're very different asset classes they are undoubtedly related. Depending on the circumstances, perhaps even strongly. Will one approach work with one and not the other? Maybe. Maybe not. Short term, long term... it means a lot. But to say these aren't related is, honestly, ridiculous.
>What am I missing? You might already know this but you can't trade the VIX directly. It's an indicator. What you can trade behaves quite differently. E.g. the VIX can go up and /VX (or UVXY, VIXY, ...) are going down. If you want to trade the VIX you need to choose an instrument you can actually trade like /VX and build your strategy around that, not around the VIX. This way you can backtest your strategy instead of theorize it.
You already know it splits frequently, compared to other ETPs. https://stockscan.io/stocks/UVXY/stock-split So the longer your hold a contract, the higher the risk of an unfavorable split, and basically all reverse splits are unfavorable for contract holders, since they necessarily make the contract non-standard. Non-standard contracts have a less liquid market than standard contracts. In general, I stay way from options, even short holding time options, on ETPs that tend to have a lot of reverse splits. I also stay away from holding options for more than 60 days. A 2 year put on a reverse-split happy ETP is suicidal. But you also have to look at tail risk. Even after adjusting for reverse splits, the variability of price covers a wide range, with a lot more price increase potential than decrease. Since long puts have capped upside (shares can't go lower than $0), long puts are on the wrong side of the distribution of tail risk for those 20% of break-out prices. Of course, you can't lose more than the price you paid for the put, so your max loss is capped.
UVXY is not vix. You need completely different data for it. It’s vix FUTURES, correlation is probably going to be ALOT lower than what you want for hedging. I think you need to look at tail risk more but you have the basis of a decent strategy. Many hedge funds run something similar, but you need to figure out the ratio for your hedge position
BEARS....................UVXY has been crushed on this recent rally............it will absolutely scream when the market tanks..........timing this puppy is critical..........get familiar with this issue......back when covid hit, I made 4X my $ in a very short period of time...............
Best way to manage risk is buying contracts with lots of time and close to in the money. I get it… you see these 50k wins here. Half them fake and the other half got lucky… however understand the value with your profit. Example I work a 9-5. I make $200 a day when I work. I take profits when when I see things hit way above my hourly job. You feel me? Take a chunk at a time. Long winded UVXY imposes lots of risk. Personally.. I look for plays that have lost wind or gained too much steam.
UVXY doesn't bet on VIX but VIX *futures*. Futures tend to follow the VIX but not always. Sometimes VIX gets ahead of the other (both up / down) and the gap between them widens. Right now VIX futures were trading higher and didn't "believe" the VIX, expecting a rebound. Now they are falling faster than the VIX as the gap closes.
Sqqq will have theta decay because of its underlying contracts having theta decay so it will always go down in the long run. So sure it’s not the worst idea. Though the real danger comes if we have a real solid crash between now and then. With how long it takes to bottom out and recover during a real recession style crash your contracts will probably expire while they are worthless before it comes back down. So there’s still risk in it. You could do the same thing with others like UVXY.
Half the time I wonder if these are just hedged accounts. I've done similar. It's honestly easier for me to track. I'll have a burner account that I may just hold UVXY calls or something. I know they'll mostly expire worthless. I don't care because in my core account I'm making it all back and then some. People with accounts that are so consistently just draining I wonder if they have a million somewhere else.
If you believe that VIX is underpriced relative to the current market conditions and you simultaneously want to go long: you can add VXX/UVXY/VIX calls 1 month out. Especially at this level It also can help you be more aggressive long as you have that extra protection. I trade VXX (RH acct) and currently am holding some 11/17 and 12/1 VXX 21c
Please don't tell me you long UVXY at 19, then add some at 17.5, and some at 16, and ran out of money buying the rest at 15. I did that and showing negative 1000 unrealized for now. I expect to see negative 2000 next week... You are not alone.... That thing jumped from 13 to 18,19 in no time. I hope there is a crash and UVXY spike back to 19 so I can get out.