VXX

Longjumping-Can-6140

How do I determine if VXX PUT premiums will continue to decline? If I expect VIX to remain elevated for the next week or two, how do I translate that to the movement of premiums?

Sharaku_US

Watch Tom King's video from last Friday and you'll see he saw the same thing. We are in for a ride guys. Calls on VXX

AtomicBlondeeee

Puts for days! TLT and VXX

TheOnlySafeCult

RIP VXX holders you were cooked the second Iran declared their revenge episode over🤦‍♂️

sharpetwo

First of, the VIX is already in percentage point technically speaking. You may not want to compute percentage on it. Sure it is "helpful" to put that movement in a very recent history. But otherwise, you should just look at price changes. A 2 points move in the VIX is not that big in a grand scheme of things. It shows concerns but not massive fear. The other thing you should pay close attention to, is the VIX ov VIX - VVIX. It is the same calculation methodology than VIX, except it uses OTM option on the VIX complex. It is basically a good indication of how much vix protection the marketplace is currently buying. Understanding these two index is not that hard (read the paper from the CBOE about it) and extremely insightful to polish your trading. VVIX and VIX are both mean reverting. And the correlation between VVIX and VIX is much stronger than between VIX and SPX. This gives a relatively simple strategy where for extreme values of VVIX, you can infer that it will revert to its most recent average, bringing back with it VIX and most likely SPX. VXX has its own set of complexities - it trades VIX futures complex. Therefore like most ETP, it is designed to go to zero as most of the time the VIX is in contango (the front month is less expensive and converge faster to the spot than the back month). There is no real advantage in trading options in VXX rather than the VIX directly. It is just a different tool and depends on what you are trying to do.

Zauberstaby

As you can see, UVXY UVIX VXX and VIXM are all in backwardsation. If this stays current, you will gain money off of these and loose on SVXY SVIX and ZIVB

killedbykindness

Volility due to the March CPI report was completely offset by a better than expected PPI report a day later. So the factors affecting Friday's volatility surge must have been due to other factors. Also this surge was much larger than when the March CPI report was released. But my question was actually technical in nature for arriving at VIX index (like which comes first chicken or the egg). Who decides how much should the measure of volility? Is it the market makers? I agree, the March CPI report event was THE REAL DEAL as FED may potentially not reduce interest rates this year. But the very next day, the market had good recovery with volatility subsiding. So my question is if there is/are leading indicates that VIX may start a pullback from current levels. Especially for the shorter term VXX.

Tryrshaugh

>I understand that volatility indices are basically derivatives and based on option positions They are not derivative instruments, but they are indeed based on options. VIX is a volatility index, which can sorta be thought of the weighted average of the IV of OTM SPY options (I'm simplifying). It is not a basket of an instruments that can be replicated. VIX cannot be directly traded. You must use futures or CFDs in order to trade it. Since VIX cannot be replicated directly, VIX futures are not bound like regular futures by no-arbitrage pricing and they necessarily are cash settled. What that means is that VIX futures mainly reflect markets expectations of volatility (you can find a statistical relationship between VIX futures and SPY straddles at similar expiries, for instance). VXX is an ETN that tracks VIX futures. In other words, it tracks what the market expects of VIX. Since the futures market overvalues VIX in "normal" times, i.e. VIX futures trade above the VIX (a.k.a contango), sort of to reflect the fact that you need to pay a premium for safety, being long on VIX futures loses money over time. In other words, being long VXX is a bit like being long and leveraged on a SPY stradle and constantly rolling it forward. >So I am expecting that one or more components of VIX may have contributed more than others. That's not how you should be thinking about VIX >Can anyone elaborate which are the major contributors to the recent surge in volility? Uncertainty goes up => Stocks are more likely to go up or down by a large amount => SPY options have more IV => VIX goes up => VIX futures go up => VXX goes up

herby325

or simply a put option on VXX

DoctorImperialism

These 517 VXX lottos are looking like they're going to be a ten bagger, at least

PapaCharlie9

If you knew VIX would hold steady, you wouldn't buy the same strike for June that you would for May. You would buy a lower strike call. So that's where the divergence of VXX from VIX would be accounted for. If you compare same strike to same strike, more time means more time value. If the increase in time value because of time is greater than the decrease in total premium value due to a lower expected future price, the further out call will cost more.

Longjumping-Can-6140

I want to sell VIX based calls (VXX). I noticed shorter term call premiums are cheaper than longer term call premiums. Why is that? I would assume calls farther out would be lower because VIX etfs trend downwards.

rfuson22

Is it time to start buying VXX?

marg1ncall

is VXX up bc of Iran is USO the cant go tits up play here?

WocketWaccoon

Loading VXX calls for WW3 next week

btctrader12

FOMO into VXX calls NOW. Up 160%. This will be at 30 after the Iran strike guaranteed

Avocadonot

The answer is volatility. Look at VXX

crowdsurfer90

anyone shorting VXX today?

btctrader12

My VXX calls are now up 140% since the morning 

bb483

VXX up 15% & mkt barely down considering that

meyer_wolf

Yes I realized that my post wasn’t clear, I actually posted today on /thetagang to see if anyone has experience on VXX 😊

PapaCharlie9

Oh, that wasn't clear from your OP. You probably want to edit the OP, or heck, it's been so long now, just make a new post specifically to hear from people that trade VXX options. As I recall, I've only seen VXX option trades discussed by people who wanted to do covered calls, so that and UVXY was the only choice anyway, or their platform or account approval level didn't support index options, so again VXX and UVXY was their only choice. Exclusive of /vx traders.

meyer_wolf

To clarify, I know the difference between the two products. I wanted to hear from people who have experience trading VXX, more specifically selling options (as VXX has time decay for example).

My-Dumb-Questions

>Seems like a normal market evolution when so many first year traders have joined Theta gang. I mean, we've seen this movie before. Retail forming an VXX/XIV gang with a spectacular resolution in 2018. Similarly, but with professional investors, so called ART funds which ended in similar excrement in 2020. Usually, these things tend to end poorly.

sharpetwo

Great you have demonstrated that you can google. Now, from a market dynamic perspective, if you price them using the VIX index (which is not tradeable and deliverable), you would basically open arbitrage possibility between the VIX options ... and the VIX futures. And in that case you would not even need to think about VIX or VXX. A much easier trade would be waiting. Good luck anyway.

PapaCharlie9

VIX is an index, so option contracts on it are index options. The contract specs for VIX/VIXW are European style and cash settled, which are sometimes advantageous. There are no shares associated with VIX so you can't do share-like trades with VIX, like a covered call. VXX is an ETP, so options contracts on it are equity options. The underlying is shares, so you can do trades like covered calls with VXX. The contract specs are American style and not cash settled, so shares are exchanged when the contract is exercised.

beachhunt

Depends on the setup. If you do spreads or condors or other defined risk trades you can specify exactly how big and small your wins and losses are, so one loss might not be much at all. You could even flip it and have a tiny chance to win a lot but constantly lose a lot. Not sure what that would be called, maybe throwing pennies into a (potentially) functional wishing well? You're right about the risk being different for VXX than with a regular stock of course. A company can go bankrupt but VXX is not likely to fall to zero. That said, vol products HAVE gotten shut down, XIV for example during the covid crash. Obv XIV worked differently from VXX but there's always some way to get screwed.

odonata_00

You have a profit now given your CB and the premium you received when you sold and its current price. If you look at the chart for VXX there isn't one scenario where if you held VXX for a month you would make money. It always goes down that's its nature.

odonata_00

Take your profit and close the position. Until you have a better understanding of VXX you don't want to be holding it and even then you don;t want to hold it for any length of time. It always goes to 0.

Csikszent

I don't know the answer, but I was curious and found this: https://www.tastylive.com/concepts-strategies/vxx I'm only able to trade VIX in my Fidelity account. I trade VXX in my other accounts.

quiethandle

Side note, it seems that you are pretty new to options, given the nature of your questions. It's great to be learning! However, I might recommend that you focus on learning more about how options work before going too deep into trading VXX options. Options are complicated enough, and doing options on volatility products like VXX or VIX are even *more* complicated. Please be very careful until you have more experience.

quiethandle

The price you sold the put at, and the price that the owner of the put bought it at is irrelevant to the decision to exercise or not. If the put expired 0.31 ITM, then that means there was 0.31 (31 real dollars) of intrinsic value to that put that would otherwise be lost if the put was not exercised against you. The owner of the put (the person opposite you) had the right to short VXX at 14.5 per share, with the actual price of VXX at market close of 14.19. That means they have an instant arbitrage: they exercise the put, going short VXX at 14.5 and then immediately purchase back the VXX shares at 14.19 - an instant 0.31 per share gain. So they have motivation to always exercise the put in this case, because it was ITM at expiration. In fact, by default, any option that is ITM by 0.01 or more at expiration will be automatically exercised, unless the owner of the option calls their broker and tells them not to exercise it (cutoff time for this decision is 5:30pm Eastern on the day of expiration). Despite the option being assigned against you, this was a winning trade for you, so congrats! (assuming VXX doesn't crash down hard on Monday) On Monday morning you could just sell the shares and be out of the position if you wanted to close it out completely.

sharpetwo

You can’t do VIX unless you uses CFDs with a broker. The best way to trade the vix is with vix futures. The front month is what is the most correlated with the index. VXX is comprised of VIX futures to replicate the performance of the VIX. I personally prefer the futures. You know exactly what you have and don’t depend on a management team like with an ETP.

Atropa_Tomei_666

I'll be loading up on VXX calls Monday what are my odds of turning a profit?

Atropa_Tomei_666

have a feeling VXX will spike before the mag 7 reports earnings

Atropa_Tomei_666

I've been noticing how efficiently the market is being priced lately, getting really hard to make any money just going to keep buying VXX calls until the big spike comes to greet me

Saaan

I only pay the VXX Puts side on mega spikes (Vix >20). 

DarthBanEvader42069

If you're looking for what to watch to gauge sentiment, IMO it's TNX and VXX

ezworldwide

VXX and UVIX are still very low. Look at the charts over time, buy shares, hold for correction. Also, buy the SPY dip. Hedge guys. You will make money.

Bear_Bull1738

1dte VXX puts and 1dte 520 spy calls, let’s get this bag 

MakesScreechingNoise

VXX you beautfiful thing!!!!!!!!!!!!

buhtpirate

VXX MMs smoking crack. The ITM options are way underpriced.

patrickswayzemullet

you just need to keep on averaging down, along with long VXX/UVXY... at some point you got to be right... RIGHT?

lootinputin

Hah yeah I wouldn’t be the slightest bit surprised if $VXX is over 17 in 2 months. I should probably stick to the instruments i know and lay off the $DJT wagon.

arbitrageME

market: "the probability of VXX doubling in the next month is 20%" you: "wanna bet?"

OnlyFaxxx

VXX calls for me with this and the serbia stuff

lootinputin

I have made solid money trading VXX. It almost feels too easy sometimes. Keep up the winning trades!

arbitrageME

I put these same positions on for the Rivian IPO, the initial DWAC spike, VXX sometimes, and almost all "exceptional" situations.

shoozerme

You shouldn't have gotten into this trade to begin with but I think you might as well hold. NVDA chart looks good and market has been bullish. As long as VXX stays muted, let the trade play out.

buhtpirate

VXX steady we gucci

stocksandwatches

VXX dropped into close. Good Friday coming up. Green AF tomorrow please so everyone can enjoy the long weekend.

justarandumthrowaway

What’s even the point of VXX? Do you just insert money knowing it’s going to going down no matter what?

buhtpirate

VXX the new GME. Look at the short float on that thing

buhtpirate

Why my man VXX not flushing

buhtpirate

VXX trying to sneak into the green zone 

OurNewestMember

Wouldn't the forward pricing in the options already reflect the expected decay in VXX/futures roll? (Kind of like the opposite of dividend accumulation in an equity?) Also is VXX expensive to short? The puts look very expensive relative to the calls (might be stale market data, though) Ie, I'm asking, to capture VXX decay via options, would you need to "fund" the "overpriced" put debit exposure with some other positive expected value (eg, selling OTM call spread tail risk)? ​ Anyway, it could still be worth trying. I don't know what the decay behavior is in the options. How long does it take for a 0.60 1-point spread to hit 0.80 under "normal" conditions? That I don't know.

MyOptionsEdge

I wrote a book on VXX with some tested strategies on VXX... on of them is similar to what you propose. The key issue is the optimization of the expiration and Options Delta of the Vertical Spread! Check here: [https://www.myoptionsedge.com/my-options-trading-experience](https://www.myoptionsedge.com/my-options-trading-experience)

RubiksPoint

Haha, you're definitely not dumb. I think I just misunderstood your question. This strategy should be profitable because it *is* SHORTVOL which has positive EV. Puts on VIX are essentially just puts on /VX and, by the put-call parity, this is nearly equivalent to shorting /VX and buying calls on /VX. This is almost exactly CBOE's [VPN index](https://www.cboe.com/us/indices/dashboard/VPN/). Buying puts on UVXY is the same as buying puts on 2x LONGVOL since that's the index UVXY tracks. With a sufficiently deep ITM put, your put ends up looking like 2x SHORTVOL (and some bonds). ​ I thought I'd share it here because these methods of obtaining SHORTVOL don't require you to: 1. Pay a high ER (SVXY, SVIX), 2. Pay a high cost-to-borrow (shorting UVXY, VXX), 3. Pay high transaction costs (daily futures balancing in SVXY, SVIX), or 4. Trade options/futures that require margin or high-level options approvals.

thekoonbear

Dude, I don’t have time for this argument. You are not as smart as you think you are. If you really want to understand this stuff, here is a well documented and referenced research paper about how the term structure of the VIX futures curve is priced into VXX options. https://deliverypdf.ssrn.com/delivery.php?ID=649017121009105026093126108095019069032034022058026059113005079074031085099122009112103042027101022023115109112123125071010016046051062093060077099090089029125102061047044088122065115031031002067088093091086086118095116065114072016105124021031084122&EXT=pdf&INDEX=TRUE

RubiksPoint

The problem is, a non-zero expected return cannot be priced in to options while maintaining (at least weakly), the put-call parity. Here's a question that might illustrate my point: "If VXX is trading at $13, should a $13 strike put cost more than, less than, or the same as a $13 strike call?" (for simplicity, let's ignore dividends, cost to borrow, risk-free rate).

Bernie4Life420

200usd into my options account Unless my 14.5 VXX calls roar to life that account is going back on ice. Back to shares. Blew it on puts that should've been calls

RubiksPoint

These are all great points. The convenient thing about UVXY, SVIX, SVXY, VXX, etc. is that that "effective" settlement date is always 30 days away. /VX shorts or puts on VIX are more sensitive to changes in the spot as their settlement/expiration approach. This is difficult to account for from a risk-management perspective. Short positions on LONGVOL ETPs also earn the expense ratio and the transaction fees of the ETP (at the cost of fees involved in your exposure). Your point about VVIX is a really important thing to consider. I like to buy sufficiently deep ITM puts on VIX to ensure that my exposure to VVIX is relatively low.

thekoonbear

Have you back tested this? Futures rolls are not a novel concept, and plenty of models are capable of accounting for this when pricing options. So the question is, do you think that you have a theoretical edge in doing this trade or do you think that the prices in the market already reflect the known fact that the futures roll causes a drag on VXX? Market makers aren’t dumb, so I’d be shocked if something like this wasn’t already priced into the market. Would highly recommend a thorough backtest before live trading.

Drohands

VXX is mooning

Bernie4Life420

gonna be another fucking dry as fuck day isn't it. How the fuck is VXX reaching it's peak in the PreMarket ?!?!

OptionsJive

I know this post is a little dated, but VXX trading questions come up often, and I think it can still be helpful. Hence, I recently put together a pretty comprehensive guide on how to trade volatility products, which includes shorting VXX. You can check it out here: [Is VXX Going To Zero? A Guide to Trading Volatility Products](https://optionsjive.com/blog/is-vxx-going-to-zero-a-guide-to-trading-volatility-products/)

wittgensteins-boat

VXX on average has declining value.  Look at a 5 o 3 year chart

Subinatori

VXX is tickling the taint too

ScottishTrader

If your question is why most may not buy put options, then it may be because the market and stocks tend to move up over time. Long puts will lose unless the stock drops by enough to offset the cost to buy along with the theta decay of the premium. Why trade VXX? This is a S&P 500 VIX Short-Term Futures ETN which is more complex than a standard stock issue. Since you are posting this in the safe haven thread it would seem to be a higher risk than a simple stock or ETF for a new trader . . .

Bernie4Life420

havent touched options for years; buy VXX calls for this week. VXX off a cliff

Longjumping-Can-6140

What is wrong with naked VXX Puts? New to trading. I typically just put everything in SPY but now have funds to take some higher upside positions. I’m starting with ~10k and put half in $15 1/25 VXX puts @ $4.50 and half in $10 1/25 VXX puts @ $1.50. My thoughts are to hold until about three months before expiration, then roll the position into other VXX puts that are a year out. I’m reading here that makes puts are taking on more risk than you have to but don’t understand why..

slambooy

Calls on VXX?? Just stop it

LucasBixtch

These VXX call gonna print hard

Subinatori

For a little while there I thought my VXX were gonna print but it turned out to just be a small pp day.

Bert_Fink69

Short the VXX why not go long on SPY (inverse) ? If the market looks good go long SPY if it's taking a 💩 go long VXX ?

Accomplished_End7585

I meant VXX Jelly brain

ezworldwide

Glad I loaded up on VXX and UVIX last month.

MakesScreechingNoise

Corn up, VXX up! Good times!

CHENWizard

When the time feels right, I’m going to buy UVIX but you’ve gotta time it right. VXX might be a little safer. Either way, anything that inverses or practically inverses the market.

Brendenlow

VXX not even moving

MakesScreechingNoise

VXX still sez doooooooooooooooooooooooom...

No-Improvement3164

Why VXX green?

Bernie4Life420

VXX dat you dawg?

Subinatori

VXX would be going through the roof if this sell off was real. Get ready for the V.

bigmanbutterfingers

Full port into VXX weeklies at open?

happytoparty

Double down on VXX calls.

happytoparty

VXX! What are you gonna do.

Master_Awareness5821

did you buy em out for March or April?? Imma jump in on that too. VXX is looking alluring too. which do you prefer?

Turbulent_Object_558

If a simple man such as me wanted to make the VXX go up, how could I do it?

Turbulent_Object_558

Guys do you think if a nuke went off in some city in the US that my VXX calls would finally print?

ezworldwide

Loaded up on VXX and UVIX on Monday - let’s see what happens……

im_astrid

if you have to ask you shouldn't be dealing in VXX options of all things jesus christ

jareer-killer1

I fucking hope so although idgaf what way we go I just need a drastic move so my VXX prints 

jareer-killer1

I hope you are wrong as PCE is my last hope for my VXX

jareer-killer1

I fucking hope we get a big move up or down idgaf I just need my VXX calls to print ffs 

MakesScreechingNoise

VXX gonna bust soon.

jareer-killer1

As much as I want this to happen so my 3/15 VXX Calls print this will never happen 

DMotorBoater

VXX is that the lowest that it has been in a month. Do with that information as you wish. Lol.

Ldjforlife

Every once in while I’ll throw down 500 bucks on VXX calls. I treat it like playing the side bets on a black jack table. Usually a trash trade/bet but when they hit it’s pretty fucking good

Professional_Age8495

VXX