Seeking Alpha

grass_hopper

grass_hopper
Send Message
View as an RSS Feed
View grass_hopper's Comments BY TICKER:
Latest  |  Highest rated
  • VIX Designer Warns Against Holding On To Volatility ETFs [View article]
    @Gumby:
    VXX is not the same as VIX! VXX is designed to lose value overtime. Read the article and look at the long term chart of VXX. Has it ever come back? If you own it forever it'll guaranteed to go down to zero.
    Oct 24, 2013. 06:10 PM | Likes Like |Link to Comment
  • How Apple Tricked The Options Traders [View instapost]
    This is great but how do we know this in advance?
    Oct 9, 2013. 07:27 PM | Likes Like |Link to Comment
  • A Remarkably Safe Way To Play The Apple Earnings Announcement [View article]
    Isn't this position essentially two calendars (short Jan-25 / long Feb-13 in both calls and puts at the same strike)?

    Beware of the IV collapse in the Feb options as well. If AAPL moves a lot the end result may be negative. I back tested similar positions with PCLN, AMZN, and some other stocks and they all looked really good before earnings (huge theta that is about to expire). However, after earnings there was very little to brag about if anything at all.
    Jan 22, 2013. 05:00 PM | Likes Like |Link to Comment
  • Use A Broken-Wing Butterfly To Capture VXX's Downward Drift [View article]
    If VXX spikes, I'd roll my position higher while increasing its size. This will bring an extra credit. Of course the initial position risk should be small enough to allow for the future increases. I usually project up to 3 rolls within the same term and one roll to the next month in the extreme case.
    Nov 22, 2012. 11:31 AM | Likes Like |Link to Comment
  • Use A Broken-Wing Butterfly To Capture VXX's Downward Drift [View article]
    VXX does crash sometimes. Just look at the last two days.

    I found that it is better to do an ITM call credit spread (or OTM put debit). The lower strike should be below the spot price by ~10%. E.g. weekly 33/36 when VXX was at 36.
    The position should be established when VXX spikes and increased if the spike continues.
    Nov 20, 2012. 11:09 AM | Likes Like |Link to Comment
  • Weekly Meetings In San Diego, CA Or Chicago, IL [View instapost]
    Thursday came and went. Where is the article, Kevin? "All hat and no cattle" as they say in Texas.
    Oct 5, 2012. 04:12 PM | Likes Like |Link to Comment
  • Get On Track With A Union Pacific Corporation LEAP Covered Call [View article]
    << In this case the value of the LEAP probably increased a bit more than the value of the short weekly>>

    Not necessarily. Delta of ITM weekly option is higher than delta of ITM LEAP of the same strike. So in the case of the stock run up short ITM weekly will increase faster than long LEAP.
    In the opposite case (sudden drop) LEAP will not lose as much because IV increase will somewhat compensate for the delta-related loss.
    Sep 21, 2012. 11:21 AM | Likes Like |Link to Comment
  • There Are No Strategies For Making Extraordinary Returns With Apple Options [View article]
    So, you bet that AAPL will stay around middle strike (680 in this case) for 2 days, correct?
    How do you plan to exit this trade? What is your best and worst case scenario? What would you do if AAPL gaps up or down by 20, for example?
    What is your position size for this trade relative to account size?
    Thanks
    Sep 10, 2012. 09:17 AM | Likes Like |Link to Comment
  • There Are No Strategies For Making Extraordinary Returns With Apple Options [View article]
    Epsilon,

    Could you please spell out 'flies parameters for the weekly AAPL trade? What strikes would you use?

    Thanks
    Sep 7, 2012. 05:12 PM | Likes Like |Link to Comment
  • How To Profit From September Volatility Spikes (And Get Paid Waiting For Them) [View article]
    VXX is designed to slowly deteriorate due to the negative roll yield. Look at the price history since inception - it's a big slide down that has no end in sight.

    That said, VXX can spike from time to time but these spikes tend to be lower and lower comparing with the previous spikes. Moreover, for the spike to be sustainable VIX futures must turn into backwardation which happens rather rarely.

    Because of that the best way to trade VXX is by shorting it when VIX spikes (the higher the spike, the better the chances of short trade to succeed).
    Sep 5, 2012. 09:20 AM | 2 Likes Like |Link to Comment
  • How To Profit From September Volatility Spikes (And Get Paid Waiting For Them) [View article]
    12/16 can be done for .26/.30 credit but it requires a larger margin. IMHO, VXX is better suited for being short either directly or via short calls. A synthetic calendar (long VIX call, short VXX call) is also a good alternative as it benefits from VIX contango.
    Sep 4, 2012. 01:06 PM | Likes Like |Link to Comment
  • Buy The VIX For A 200% Gain [View article]
    I don't understand why people bash an instrument with a near perfect track record. Do you prefer certainty over uncertainty? If so, would you rather trade an instrument that is more predictable than less predictable? Does it matter what direction that instrument goes as long as you can identify and trade in that direction?
    VXX is a great trading instrument because it is predictable. So what it goes down? Trade in that direction instead of complaining how bad the instrument is.
    Jul 11, 2012. 09:22 AM | 1 Like Like |Link to Comment
  • Why Is The VIX ETF Near An All-Time Low? Same Old Contango [View article]
    Yes, it is called SPY LEAP DOOM Put. Look at Jan'14 120 put, for example. It is trading around 10. If SPY drops 25%, that put will get to 20-30 range. An if not, it won't lose much due to the time decay or upward movement of SPY.
    Jul 10, 2012. 08:36 AM | Likes Like |Link to Comment
  • Why Is The VIX ETF Near An All-Time Low? Same Old Contango [View article]
    What about double short of inverse leveraged ETFs?
    E.g. short both SSO & SDS. That pair would produce ~4% year to date without much of the directional risk. Some re-balancing would be needed when ETFs become too uneven.

    As for vol trade, it is better to buy a long term SPY strangle (9-12 month) when VIX hits a new low. Then wait for a VIX spike and sell a near month SPY butterfly. The overall position will be theta negative and gamma/vega positive.

    It should produce short term gains while also increase substantially in case of overall market crash. As the time goes by, close the butterfly and re-open for the next month, different strikes.
    Jul 6, 2012. 05:44 PM | Likes Like |Link to Comment
  • Fear Of 'Fear Index' Tracking ETNs May Provide Opportunity [View article]
    It's not a good idea to buy VXX shares for any reason other than covering a short position.

    The original question was: "What should I do since my VXX declined?" Selling calls could be one of those things but selling puts in addition to calls increases the risk of the position. I think it makes more sense to sell double amount of calls (synthetic straddle) if VIX spikes instead of selling puts that are a) have less premiums than calls, and b) make position more vulnerable to the downward price movement.
    Jul 6, 2012. 05:21 PM | Likes Like |Link to Comment
COMMENTS STATS
86 Comments
17 Likes