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Excellent market strategy and timing! I wouldn't short any chart that moves from the lower left -> upper right. The ones I mentioned previously do the opposite

Excellent market strategy and timing! I wouldn't short any chart that moves from the lower left -> upper right. The ones I mentioned previously do the opposite. Their chart goes from the upper left -> lower right. Still, timing is so important. If you had gone long UPRO on Feb 18, you would have seen $80 -> $24 in about 6 weeks. Losing 70% of your money would be a little unsettling. You're obviously one of the "big boys". Most people don't dare play in VIX futures, because of the intrinsic high leverage and because of the high volatility. Wouldn't it be less risky to trade VIX options instead? I don't follow either closely, I'm genuinely asking.

smabie 7y ago
Yeah, totally, you can really lose your lunch with VIX futures (both going long or short). It's a dangerous game, I wouldn't really recommend it to anyone. I manage a small/moderate amount of money for friends and family as well as myself (in a different account), and the kind of plays I do for them are very different than what I do for myself (if I lost all of my money I would be fine, it I lost all of their money I don't think I'd be able to live with myself). While I do use leverage in my family and friends fund, it's never above 1.5x, while with my own money I usually run between 2.5-3.25x. I myself don't touch options because I feel like I don't have a good academic grasp of them. I work in portfolio analytics for equities and futures, so those are pretty much the only things I hold in both my family and friends fund (actually in that fund it's just ETFs) and my own personal fund. Would options have been the better risk/reward play? Probably/maybe, but it's never a good idea to invest in things you don't have a complete understanding of. The ultimate point I'm making about leveraged ETFs I guess is that people have different risk tolerances. Just accepting whatever the market gives you rarely makes sense as the return to vol ratio is probably either higher or lower than your personal risk tolerance. My risk tolerance is very high, so I invest in ways that align with it, yours might be low, so likewise, invest accordingly. But don't just take whatever the market throws at you.

smabie 7y ago

Yeah, totally, you can really lose your lunch with VIX futures (both going long or short). It's a dangerous game, I wouldn't really recommend it to anyone. I manage a small/moderate amount of money for friends and family as well as myself (in a different account), and the kind of plays I do for them are very different than what I do for myself (if I lost all of my money I would be fine, it I lost all of their money I don't think I'd be able to live with myself). While I do use leverage in my family and friends fund, it's never above 1.5x, while with my own money I usually run between 2.5-3.25x. I myself don't touch options because I feel like I don't have a good academic grasp of them. I work in portfolio analytics for equities and futures, so those are pretty much the only things I hold in both my family and friends fund (actually in that fund it's just ETFs) and my own personal fund. Would options have been the better risk/reward play? Probably/maybe, but it's never a good idea to invest in things you don't have a complete understanding of. The ultimate point I'm making about leveraged ETFs I guess is that people have different risk tolerances. Just accepting whatever the market gives you rarely makes sense as the return to vol ratio is probably either higher or lower than your personal risk tolerance. My risk tolerance is very high, so I invest in ways that align with it, yours might be low, so likewise, invest accordingly. But don't just take whatever the market throws at you.