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Uvxy ( or any other inverse/short play on the market)

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Posts: 42

CraigBuchanan

Prospect

Joined: Oct, 2009

Posts: 182

Posted: Apr. 15, 2013 - 4:18 PM ET #26

it cannot mirror the vix because it has high fees and a high cost for rolling over futures contracts continually.

the vix is just an index that tracks.

you guys may be better served just buying calls on VIX if you want to risk less and think theres a short term time frame that the correction will occur before.

also calls are better for people with less money

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CraigBuchanan

Prospect

Joined: Oct, 2009

Posts: 182

Posted: Apr. 15, 2013 - 4:19 PM ET #27

Quote Originally Posted by bill702:

It's finally running a little bit.

Still Vix up 32 percent and UVXY only up 16 percent. We should be at 64 percent and above $10 if it actually came close to its 2x goal. I have a break even point at 7.36. I think after this week I'm just going to play it for short short trades since its not even close to following its objective.

sell in the after market and take your gains

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wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 56778

Posted: Apr. 15, 2013 - 7:50 PM ET #28

All vehicles like this have fees, to me the bigger issue and why I am so stubborn with this is the VIX itself.

The VIX is sitting at multi year lows because the market has been selling volatility for the last two plus years and it has been working because the FED is fueling the market and has pretty much said that they wont allow the market to fall.

So irregardless of the current price, if you think the VIX and thus the leveraged TVIX/UVXY etc are going to return to traditional levels historically then this is a huge buying opportunity.

If you think the FED will always backstop the market and that will never end/fail then this trade will keep being difficult.

There is zero fear in the market right now, even today there was not serious fear.

I can handle the punishment as I think the markets are dramatically overbought and the FED cannot put a floor on the market even if they claim to be able.

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bill702

Veteran

Joined: Jan, 2009

Posts: 2235

Posted: Apr. 15, 2013 - 7:52 PM ET #29

Yea, I ended up selling everything I had at 8.20 at 12:40 and ended up putting a buy order of 500 in for 7.50 right away and it went through with 5 minutes left in the day at 12:55. I was going to sell it again in the after hours, but never really had to deal with this "free ride" stuff so wanted to read up a little more on it.

I understand with the fees and everything that it won't double it, but why claim to try and double it and rarely come close to it? I honestly only came across this one because of your original post. I play with FAZ and Tza usually, but they are consistently close to the 3x. This one claims to be double, but on up days I'm only seeing it be at a quarter of it usually and at most at half.

I will say this moves a lot faster than FAZ and Tza it makes it a little more interesting. I have never held onto FAZ and Tza aslong as I held this one. I was giving it until Friday till I cut my losses so the timing of today's bloodbath worked out well.

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wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 56778

Posted: Apr. 15, 2013 - 8:11 PM ET #30

Keep in mind that it is not a double or 3X fund because of the reverse splits..

I think they trade side by side currently due to the splits and the corresponding prices.

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bill702

Veteran

Joined: Jan, 2009

Posts: 2235

Posted: Apr. 15, 2013 - 8:25 PM ET #31

Quote Originally Posted by wallstreetcappers:

Keep in mind that it is not a double or 3X fund because of the reverse splits..

I think they trade side by side currently due to the splits and the corresponding prices.

Why wouldn't it be a double or 3x fund even with the reverse splits? We are just talking a percentage basis right? I figured the splits were just to make the prices more attractive. Or was I just completely wrong and that's why UVXY is trading at a fraction of the Vix.

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wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 56778

Posted: Apr. 15, 2013 - 9:29 PM ET #32

Quote Originally Posted by bill702:

Why wouldn't it be a double or 3x fund even with the reverse splits? We are just talking a percentage basis right? I figured the splits were just to make the prices more attractive. Or was I just completely wrong and that's why UVXY is trading at a fraction of the Vix.

Its price is meant to mirror the 2X/3X etc etc, all these are targeted that way but if the price for the UVXY is reverse split then it no longer would follow the way it did previous to the split..

Similar to the price of any stock that does a forward or reverse split.

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bill702

Veteran

Joined: Jan, 2009

Posts: 2235

Posted: Apr. 15, 2013 - 9:46 PM ET #33

Ok then maybe I am completely wrong about how these work. Can you dumb it down even further?

Why would it change after a reverse split? It's all based off of the NAV. So this fund takes the money they have invests it on a daily basis to closely mirror the objective of the fund. How or why would that change after a reverse split? The same money is there and yes people have the ability to trade and change it off of the NAV, but even following the NAV on a particular day the UVXY wouldn't have met the 2x goal.

I always assumed the reverse split was to bring the two related funds closer to each other and once it gets low enough it's more easily manipulated.

I know I come off as argumentative many times, but I'm not trying to be at all here I'm just looking for further clarification and I appreciate the response.

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wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 56778

Posted: Apr. 15, 2013 - 10:01 PM ET #34

I am fine, and I dont think you are arguing.

The issue is PPS..price per share.

This trades at X ammt per share and originally it was meant to mirror the short term trading Vixx and it did at that time.

It is impossible for the fund to bump up the leverage it had prior to match the 2X measure..

I imagine it still trades the futures leveraged 2X as it originally did, but if it were to continue to do so after a 1 for 4 reverse split then it would need to lever what 6X it did previously to achieve the same ending ratio it had before?

Until both measures are the same as it originally was (the value of the short term Vix and UVXY) then the fund cannot track the way it originally did.

Before the reverse it did trade much closer to the ratio, and after the split it did not.

Also, the VXX and UVXY are not identical measures..go to Yahoo Finance and read the description of each..there are subtle differences that make them not identical.

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bill702

Veteran

Joined: Jan, 2009

Posts: 2235

Posted: Apr. 15, 2013 - 10:37 PM ET #35

I guess this is one spot I definitely did not know what I was trading.

I just assumed since the cash they had in the fund was the same and the shares adjusted accordingly after the split that it wouldn't have had to leverage more to get the same results.

So as far as these inverse funds which one do you trade the most actively? Or are you holding waiting for the big pop that is expected?

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wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 56778

Posted: Apr. 15, 2013 - 11:25 PM ET #36

Quote Originally Posted by bill702:

I guess this is one spot I definitely did not know what I was trading.

I just assumed since the cash they had in the fund was the same and the shares adjusted accordingly after the split that it wouldn't have had to leverage more to get the same results.

So as far as these inverse funds which one do you trade the most actively? Or are you holding waiting for the big pop that is expected?

Ive got UVXY and FAZ only..

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CraigBuchanan

Prospect

Joined: Oct, 2009

Posts: 182

Posted: Apr. 16, 2013 - 6:40 PM ET #37

i couldnt sit out....grabbed 2500 shares near close of 6.45 then 1000 shares in ext at 1:02 pm at 6.36...

i think the pain is coming during earnings

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CraigBuchanan

Prospect

Joined: Oct, 2009

Posts: 182

Posted: Apr. 17, 2013 - 12:00 PM ET #38

just got out. NICE gain for less than 3 hours in market! $7.94 sell of 3500 shares

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wallstreetcappers

Covers Linesmen

Joined: Feb, 2003

Posts: 56778

Posted: Apr. 17, 2013 - 1:28 PM ET #39

Quote Originally Posted by CraigBuchanan:

just got out. NICE gain for less than 3 hours in market! $7.94 sell of 3500 shares

Good work..

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bill702

Veteran

Joined: Jan, 2009

Posts: 2235

Posted: May. 9, 2013 - 12:57 AM ET #40

It's about that time again got back in today at 6.90

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bill702

Veteran

Joined: Jan, 2009

Posts: 2235

Posted: May. 9, 2013 - 11:14 AM ET #41

Oops obviously 5.90

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CraigBuchanan

Prospect

Joined: Oct, 2009

Posts: 182

Posted: May. 14, 2013 - 12:29 PM ET #42

was thinking about it but just shorted netflix

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Uvxy ( or any other inverse/short play on the market)

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