UVXY Vol Play

voltrade

Newbie
3 0
Hello,
I am considering to buy UVXY for my 401k portfolio?
Currently it is $7 - $8 range, last august it was $250.
I am looking forward for vol pop where vix will go to 30 in the next 2 years?

Any advise on this is appreciated? Any gotcha's i need to be aware of?

Best
- Vol Trader
 

tar

Legendary member
10,443 1,313
I advise you not to , first it is a short term ETF meaning it is based on VIX near futures contracts , so the continuous rollover at each VIX futures expiry will kill you because futures contracts trades at a premium already , plus it is an Ultra ETF meaning it has double the effect which makes things worse , unless VIX pops in the near future . If you insist in playing the VIX at least take a look at VXZ but i don't like it either .
 

voltrade

Newbie
3 0
I advise you not to , first it is a short term ETF meaning it is based on VIX near futures contracts , so the continuous rollover at each VIX futures expiry will kill you because futures contracts trades at a premium already , plus it is an Ultra ETF meaning it has double the effect which makes things worse , unless VIX pops in the near future . If you insist in playing the VIX at least take a look at VXZ but i don't like it either .

Thanks for your quick response. I must admit i do not completely understand roll over and contango effect. From a layman's perspective, if you buy and hold/wait (maybe 2 or 5 years) for VIX to touch 40, then I thought UVXY (currently @ $7.xx) and VXX (current @ $20.xx) will quadruple? I may have gotten this all wrong, appreicate your input.
 

tar

Legendary member
10,443 1,313
Thanks for your quick response. I must admit i do not completely understand roll over and contango effect. From a layman's perspective, if you buy and hold/wait (maybe 2 or 5 years) for VIX to touch 40, then I thought UVXY (currently @ $7.xx) and VXX (current @ $20.xx) will quadruple? I may have gotten this all wrong, appreicate your input.

It depends when it will happen , if it happens within few months then yes you may make good money , but 2-5 years is a long term to play the VIX ,the UVXY chart says it all .
 

BataviaTrader

Member
94 5
Hello,
I am considering to buy UVXY for my 401k portfolio?
Currently it is $7 - $8 range, last august it was $250.
I am looking forward for vol pop where vix will go to 30 in the next 2 years?

Any advise on this is appreciated? Any gotcha's i need to be aware of?

Best
- Vol Trader

Advice from a rookie: I'm with Tar here, I shouldnt jump in. From a technical perspective, price is still underneath a massive Kumo cloud. and there are no signs of a Kumo twist coming up.... stay on the side line!

 
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voltrade

Newbie
3 0
Thanks for your input. If it is not too much, can you pls alert when it is time to buy? As you can see, it is a ride of a lifetime!! UVXY dropped $250 to $7 in last 9 months, this will happen again... just we don't know when???
 

BataviaTrader

Member
94 5
Thanks for your input. If it is not too much, can you pls alert when it is time to buy? As you can see, it is a ride of a lifetime!! UVXY dropped $250 to $7 in last 9 months, this will happen again... just we don't know when???

isn't that exactly what makes you a trader? YOU got to do the works here man.

a classic advice is ..buy when price is high. sell when price is higher.

If price drops from $7 to $ 0.99 I personally would't call it the ride of a lifetime.
 
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