Seeking Alpha

Some people just enjoy pain. More than $520M has poured into leveraged-volatility ETPs (UVXY,...

Some people just enjoy pain. More than $520M has poured into leveraged-volatility ETPs (UVXY, TVIX) in Q1 even as their value continues to decline. The un-levered tracker of the VIX (VXX) has drawn in $620M. Bets on the leveraged products are bets on a crisis emerging ... quickly. "When bad things don't happen and you lose your premium," says a market maker, "most people don't complain."
Comments (16)
  • what happens to tvix if any of the following happen
    1. north korea explodes nuclear device anywhere.
    2. israel attacks iran
    3 eurozone implodes
    4.japan implodes
    5.chinaattacks japan
    6. bernake sells some bonds
    7.tea party shows their ignorance again
    26 Mar 2013, 11:08 AM Reply Like
  • PRNK recently exploded a (test) nuke. Not much happened with anything, much less TVIX.


    Do you invest in this and/or like-creatures? Do you short them, go long or mix depending on day of the month? What kind of returns have you experienced? Just curious.
    26 Mar 2013, 11:29 AM Reply Like
  • "tea party shows their ignorance again "
    You are showing YOUR ignorance.
    What 'ignorance' is this? Pointing out our $16 trillion debt, pointing out that the Democrats are spending money we dont have and we cant spend our way to prosperity? The idea that the stock market will collapse because some fiscally sane political activists will say or do something to upset the BigGovernment cartel is .... ignorant.
    26 Mar 2013, 11:39 AM Reply Like
  • you or i one is ignorant...i am talking about tvix and the market...what the hell are you talking about??
    26 Mar 2013, 01:03 PM Reply Like
  • would failing to raise debt ceiling be ignorant?
    is sarah palin ignorant?
    would shutting the government down be ignorant?
    26 Mar 2013, 01:11 PM Reply Like
  • Earlpearl, there's got to be a better way to do the end-of-the-world trade besides TVIX. Why not long-dated puts on stock indexes financed by selling short-dated calls? Or cash, which has a small chance of going down 50% in the next few months? Even gold, which I do not like at all, is a better long-term hedge than TVIX.
    26 Mar 2013, 03:35 PM Reply Like
  • i have others, but market does not have to crash for tvix to mmake money,,,it just needs to go back to 400 point swings per week.


    i have jgbd and fixing to buy more...10 year jap bonds at 6 tenths of one percent and boj is promising inflation..has to work someday


    i recently sold my ycs calls i paid $1 each for and sold for 9 11 and 13...they are 18 today i sold too soon....also have silver and gold,,more silver thangold....i like to gamble...not invest
    26 Mar 2013, 07:51 PM Reply Like
  • LOL at ya... someone very ignorant predicted the sequester would cause all manner or pain and agony and would be the end of civilized life ... that ignorant person was our President. Obama engaged in false fearmongering and the sequester non-event exposed his lies.


    I laughed at the predictions that the sequester would be bad for the stock market and I was right. I laugh at the predictions that a govt shutdown would be bad for the markets as well. I checked the history. The stock market did fine in 1995-1996 during that shutdown. less Govt spending is GOOD for the stock market. The only bad thing would be a failure in fiscal discipline that causes a downgrade. There wont be a shutdown anyway, the GOP are caving just like you would want them to. So no worries anyway.


    BTW, if you are talking about the stock market why are you bringing in palin? that's irrelevent and shows an unhealthy obsession.
    31 Mar 2013, 07:58 PM Reply Like
  • How remarkable. Among my favorite investment ideas, these have been among the biggest movers this year:


    26 Mar 2013, 11:09 AM Reply Like
  • ...Another two week of rally underway. Click on link to view chart and discussion
    26 Mar 2013, 12:06 PM Reply Like
  • These are day trade instruments, too many people think of these like typical investing stocks. If a crash is going to happen, you will know about it and then you get UVXY or TVIX or whatever flavor of hedge you prefer. There is no reason to invest in these beforehand, you will only lose money to shorts, decay, POMO, and everything that continues to drive this market upwards.


    Day trading these instruments, however, can be profitable, but it requires discipline, knowing what to look at, when to get in, when to get out, key areas to watch, trading tools, etc
    26 Mar 2013, 01:18 PM Reply Like
  • Too many people treat these like individual stocks, investing in them and hoping they pay off eventually. Unfortunately hope is not a good strategy and the performance is very bad, most people aren't knowledgeable enough or have the discipline to trade them and end up losing money.


    The market will show signs of weakness and then you can look into day trading these instruments (as they should be traded). Until you have the knowledge and discipline to trade these, you should stick with large cap companies, usually ones that pay dividends, and start learning as much as you can.


    If you are interested in trading these ETFs, please try it with paper accounts(fake money), such as google finance or ameritrade or anywhere else. You will learn so much without losing money like most people do when first getting into trading.
    26 Mar 2013, 01:22 PM Reply Like
  • well i hve 25,000 shares tvix average price 4.20 and am buying 10,000 more at $3.40 if it gets there..i expect a one day jump of 30% or more in the next 60 days so i will own them when they do...meanwhile i am stuck but will continue to buy them every 5% move down and lower my sit back and watch and see how it turns out
    26 Mar 2013, 02:29 PM Reply Like
  • The spring of '12 I bought TVIX thinking with the conditions in Europe, Wall Street would tank. Wrong! I finally started buying XIV YTD +129%. When Bernacke quits printing then I will switch to VIXY. EARLPEARL is correct in that I saw +39% in one day with TVIX. Unfortunately I didn't own it at the time.
    27 Mar 2013, 01:09 AM Reply Like
  • i too owned xiv at 6 bucks and sold for 15...long time ago it seems.xiv is 23 now i sold way too soon...but i saw xiv with 4 handle while i owned it at 6
    27 Mar 2013, 09:48 AM Reply Like
  • Owning long VXX or TVIX or UVXY hoping for a ¨black swan event¨ is kamikaze sort of behaviour... Contango (and leveraged and compounded contango in UVXY and TVIX) will make it feeling like ¨picking pennies in front of a steam roller¨. Those are short time or daily instruments!!! I learnt that in the bad way... Howhever, XIV is an excellent buy & hold idea in the ¨QE FOREVER¨ present policy in USA, Japan and EU. But must be monitored and cared like unstable nitroglycerine.
    30 Mar 2013, 03:17 PM Reply Like
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