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Money pours into VIX-related ETPs (assets hitting a new record $3.4B) as investors continue to...

Money pours into VIX-related ETPs (assets hitting a new record $3.4B) as investors continue to bet (or hedge) on an ugly end to last quarter's powerful risk rally. "(It's) been the busiest month of the year for hedging, and activity is up 100% from a year ago," says Steve Davenport of Wilmington Trust. VXX -74% YTD.
Comments (11)
  • mpcascio
    , contributor
    Comments (172) | Send Message
     
    Your timing must be exquisite to make money with VXX.
    2 Oct 2012, 03:24 PM Reply Like
  • bartlow
    , contributor
    Comments (77) | Send Message
     
    "exquisite"? How about 'miraculous'. Not only that, but to make up for a loss of 50% requires a gain of 100%.... formidable odds given the already high cost of leverage and the monthly roll cost that represents an almost insurmountable headwind.

     

    2 Oct 2012, 08:25 PM Reply Like
  • reid3844
    , contributor
    Comments (41) | Send Message
     
    Not meaning to be rude, but how do you lose 50% on a stock? If it drops in one day, I can see, but I almost never hold a stock that is moving against me. It costs ~$20 to sell and re-buy. Perhaps you were just talking about the stock price versus a position.

     

    I also trade both ways (when I can get shares). I don't understand why more people don't. If you do, the market is always rallying.
    2 Oct 2012, 08:53 PM Reply Like
  • Kvade
    , contributor
    Comments (30) | Send Message
     
    VIX-related ETPs...come on guys at SA....don't let people loose money. Your timing has to be in the 24hr range...impossible NOT to loose money there...(contago)
    2 Oct 2012, 03:27 PM Reply Like
  • Tack
    , contributor
    Comments (13040) | Send Message
     
    More bullish news.
    2 Oct 2012, 03:29 PM Reply Like
  • chanthirani
    , contributor
    Comments (466) | Send Message
     
    Vix related ETPs buy and sell VIX futures. They tend to go downhill because of the contago effect. This happens when they sell the present month and buy the next month's futures.
    2 Oct 2012, 03:31 PM Reply Like
  • Nahodny Okoloiduci
    , contributor
    Comments (144) | Send Message
     
    Ah, VIX-related ETP... check the correlations first..
    2 Oct 2012, 03:34 PM Reply Like
  • Sirvasq
    , contributor
    Comments (318) | Send Message
     
    Since last year tanked, it stands to reason that this year the VXXrs all get burned, with a further rally. Smart money is graded on a curve, people.
    2 Oct 2012, 03:38 PM Reply Like
  • Nahodny Okoloiduci
    , contributor
    Comments (144) | Send Message
     
    you will never read about smart money ideas on ANY news or blogs
    2 Oct 2012, 03:55 PM Reply Like
  • reid3844
    , contributor
    Comments (41) | Send Message
     
    VXX momentum has the slightest upside as of today (10/2). A pop is due tomorrow or the next day.
    2 Oct 2012, 07:46 PM Reply Like
  • Charles U. Farley
    , contributor
    Comments (14) | Send Message
     
    The VXX remains irrational a lot longer than I seem to be able to remain liquid.
    3 Oct 2012, 03:42 PM Reply Like
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