When Jim Cramer blamed “a group of complete morons” for the recent market downturn, he didn’t necessarily call out short-vol traders by name, but it certainly isn’t difficult to read between the lines: Cramer has also recently called XIV a “phony product” as well as a “toxic cigarette for the market.” Sure, it’s easy to…
How ’bout those VIX products, huh? For a few brief moments this morning, when XIV, SVXY, and VXX were all halted, I felt like I was in a Twilight Zone episode. SVXY is currently trading again at one-tenth of its former price, and given the fact that it tends to go up over time, I’m temped…
When people ask me how I make money, it’s difficult even to know where to begin. As a seller of UVXY calls, I’m trading a derivative (call options) of a derivative (M1 and M2 VIX futures contracts) of a derivative (S&P index options). The underlying asset, volatility, isn’t tangible like gold or oil, and I’m…
Unlike TVIX, UVXY and VXX are optionable and thus raise the question for the short vol club: Is it better to short shares directly or to take a less direct short position by selling calls? Personal preference will dictate the answer, but for my trading, I’ve been able to surmount the disadvantages of selling calls…
After hearing about the tremendous returns Seth Golden has earned year after year, I felt that my own annual returns, which were already good, could be much better if I joined in the short volatility product trade. This meant taking short positions (or selling calls, buying puts, etc.) on UVXY/VXX/TVIX/VIXY/etc. and/or taking long positions on…
I know it’s not a great idea to dabble when it comes to vol product trading, but when the VIX popped today, I thought I’d try something a little bit different than my go-to strategy of selling UVXY calls. Don’t get me wrong — I did sell some UVXY calls, but on a whim I…
Until recently, I had a terrible habit of selling weekly options. I don’t just mean the options that happen to expire on days other than the third Friday of the month; I’m saying that I would sell calls and puts that were to expire in 5 days or fewer. The allure of quick, easy profits…
Today I received an e-mail message from one of my concerned students: Hello Mr. Moadel, I’ve been running into a lot of information about a possible recession approaching in 2018, including but not limited to: Markets overextended Short-term treasury bond yields now greater than long-term yields Continued dollar devaluation Other countries beginning to drop the…
Critics on Twitter, StockTwits, and other social media platforms will tell short sellers (as well as call writers) of UVXY/VXX/etc. that it will require a whole lot of luck to continue to place these trades and not get mauled. My retort to that is that over time and over a large number of trades, it…
Having posted YouTube videos on just about every popular chart indicator, I’ve become familiar with everything from MACD to stochastics to the Bollinger bands and many more. The most common one, however, would be the simple moving average (though the exponential moving average is also popular). To be more specific, the 200-day moving average (200DMA)…
