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Short interest in VIX soars

  • The VIX could be coiled for a major spike the next time equities stumble, says SocGen, noting short interest in VIX futures has doubled since the end of June. "The concentrated short in the VIX futures is like a red point if you look at a map of the market, signaling potential risk,” says strategist Ramon Verastegui. A short squeeze in the VIX could spill over, he says, accelerating any downward action in equities.
  • The last time investors were close to being this short VIX futures was in February, just ahead of a 34% spike late in the month amid the sequester debate and Italian politics.
  • VIX ETFs: CVOL, VXX, VIIX, VXZ, VIIZ, TVIX, TVIZ, XXV, XIV, ZIV, XVIX, VQT, VIXY, VIXM, XVZ, IVOP, UVXY, SVXY.
Comments (4)
  • hannaco12
    , contributor
    Comments (3) | Send Message
     
    i have bean long vxx and tvix since early summer .,and it was NG. after the no war . i sold half of my poss. do you think in the next six week well see a covering .for them to go up.
    18 Sep 2013, 11:45 AM Reply Like
  • BearyBull
    , contributor
    Comments (17) | Send Message
     
    Avoid the VIX. Go to the casino if you like gambling with terrible odds
    18 Sep 2013, 01:04 PM Reply Like
  • Da Bing
    , contributor
    Comments (11) | Send Message
     
    Look at long term 2x and 3x VIX securities, while not quite linear these "investments" are regressing to 0. If you want to play these instruments sell calls and buy puts.
    18 Sep 2013, 01:41 PM Reply Like
  • moonlightingt
    , contributor
    Comments (23) | Send Message
     
    VXX and UVXY may bounce back like a spring at any time (market is ahead of itself for sure). 15% either way within a trading day is not unusual for the 2x ETF (the delta between its top and bottom today was close to 13%). Now, these ETFs are globally on a race to 0, so you have to catch the bounce at the right time and unload any long position that you may have (hopefully for a profit).
    18 Sep 2013, 10:55 PM Reply Like
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