Quote:
Originally Posted by 4444
how do you play TVIX, i get that its the VIX fear indicator, and obviously you only enter after open, exit before close, but what indicates that it will increase during the day? just seems like day trading on technicals to me, but doesn't appear that's what you're doing - really interested
|
Try not to think of it in terms of playing the vix index so much as the s&p, the price fluctuations in xiv and tvix mirror those of the s&p 500. (though at a more severe rate due to the 2x/3x leverage)
There is nothing wrong with holding either of these etn's longer than a day, a week, or even for months. But due to the recent market volatility if you were to plan on holding for any extended duration you would likely cross over your buy-in price on multiple occasions, defeating the incentive to hold as you could have traded it on a number of occasions and made some profit. The trouble with holding overnight is that you are really at the mercy of overnight markets and foreign news, the movement of the major indices has, as of late, been purely on the basis of speculation and psycology... fundementals dont seem to be a factor. So based on this I play the two ETN's based primarily on political and financial headlines.
There is better ways to play the ups and downs with options, i prefer the index based etn because i do not have the additional worry and research associated with playing the options of specific equities. With an index based etn you need to worry about general market sentiment, with equities you have to worry about market sentiment and the particular aspects of that specific equity. (Such as the specific operating industry, financials, management issues, geo political issues, individual commodity prices, etc which imo leave you more exposed to risk)
Thats just my 0.02, doesnt mean any of it is right lol.
Holding overnight can really pay off, or really suck. Depends on your level of risk tolerance really, i've held overnight and been burnt, and also been rewarded. For me with the euro situation as it is, any entry point around 9$ on the tvix is worth playing.... At least for now... Though the tvix will never again hit the 80$ range it did in october 2011, there is still potential for an two bagger+ if any of these eurotard nations have a social meltdown.