StockFetcher Forums · Filter Exchange · A NEW ^VIX TRADING SYSTEM<< 1 ... 8 9 10 11 12 ... 25 >>Post Follow-up
354 posts
msg #131457
Ignore gmg733
9/23/2016 11:41:17 AM


Uvxy calls are lottery tickets. What will the market do? I don't know. I stopped predicting direction and let the market tell me where it is going.

If you think vol will continue sideways or fall, buy some xiv or svxy. If you wanna be bullish, very bullish, sell some options to pay for a long Uvxy call. Just know that Uvxy call will decay from theta and vega contraction. So that is why you'd sell puts in something to finance and offset your long call Greeks. Probably sell 2 puts of whatever to finance your Uvxy call for a small credit like a dime.

I would probably not do this trade unless I found the right instrument on the put side or I'm sure Vix will spike. On issue you have is the b/a spread in Uvxy is a little wide.

2,355 posts
msg #131464
Ignore shillllihs
9/23/2016 3:37:01 PM

Well the question is, can you predict if market will tank on the price of options.
If you see October 60 calls for .03 cents, does that kind of tell you there will be no spike
till late November or later? I guess you answered my question but was just wondering if these prices seem
in line.

354 posts
msg #131469
Ignore gmg733
9/23/2016 6:42:40 PM

Yes and no. You can look at delta and use it as an approximation of being in the money. So .20 delta is 20 percent prob of being in the money. But there is kurtosis and we won't go there.

If the market were to predict a move you'd see bid ask spreads widen. They get you coming and going. :)

3,879 posts
msg #131513
Ignore Kevin_in_GA
9/26/2016 9:45:28 PM



153 posts
msg #131527
Ignore tennisplayer2
9/27/2016 12:32:33 PM

Kevin, as always, thanks for your willingness to help us become better traders.

3,879 posts
msg #131528
Ignore Kevin_in_GA
9/27/2016 1:02:46 PM

No problem - I just keep seeing people here trading without any real framework or tested strategy. Always trying to second guess the markets or trading on a hunch - that is not a strategy, that is gambling. Professional traders stick to rules, wait for high probability entries, and exit when their strategy requires it (I personally still have difficulty with that last one).

I picked up 1000 shares of VXX at $34.00 this morning, just following the long buy signal from last night.

671 posts
msg #131533
Ignore miketranz
9/27/2016 2:47:50 PM

Kevin,I agree 100% with everything you just posted.Just to get this straight,you're going long,trading VXX,but that instrument is trading counter to the market today.Wouldn't you use a long ETF? I don't get it.Thanks as always for your generosity and never traded @33.00 today..

3,879 posts
msg #131534
Ignore Kevin_in_GA
9/27/2016 2:51:10 PM

mike - the system buys low and sells higher. Today, with the VIX down 9% and VXX down almost $2, seems like a good time to buy with the expectation of a mean reversion.

642 posts
msg #131535
Ignore mahkoh
9/27/2016 3:13:31 PM

I'll join you on this one. Bought 1 VIX Oct18 10 call for $5.40

46 posts
msg #131536
Ignore c1916
9/27/2016 3:44:07 PM

I've got my toe in this water as well with an October Risk Reversal on VXX 36/41 spread for $0.75.

StockFetcher Forums · Filter Exchange · A NEW ^VIX TRADING SYSTEM<< 1 ... 8 9 10 11 12 ... 25 >>Post Follow-up

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