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VIXY: Possible Short-Term Gain, Likely Long-Term Pain


  • 2022 has been a volatile year. Owning some VIXY for the sake of protecting the portfolio against sizable losses could make sense.
  • However, the fear index has consistently reverted to a mean over time. Today's high levels suggest that VIXY is bound to dip soon.
  • The time to buy insurance is not when the house is on fire. VIXY is a sell at current levels, even if it may trend favorably in the short term.
  • Looking for a helping hand in the market? Members of EPB Macro Research get exclusive ideas and guidance to navigate any climate. Learn More »

Man Getting Sick On A Rollercoaster

DNY59/iStock via Getty Images

The stock market continues to bounce off the walls, reacting to the laundry list of developments that have been impacting the economy lately:

  1. record-high inflation;
  2. rising interest rates;
  3. signs of a global economic slowdown;
  4. disrupted

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This article was written by

DM Martins Research profile picture

Daniel Martins is a Napa, California-based analyst and founder of independent research firm DM Martins Research. The firm's work is centered around building more efficient, easily replicable portfolios that are properly risk-balanced for growth with less downside risk.

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Daniel is the founder and portfolio manager at DM Martins Capital Management LLC. He is a former equity research professional at FBR Capital Markets and Telsey Advisory in New York City and finance analyst at macro hedge fund Bridgewater Associates, where he developed most of his investment management skills earlier in his career. Daniel is also an equity research instructor for Wall Street Prep.

He holds an MBA in Financial Instruments and Markets from New York University's Stern School of Business.

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On Seeking Alpha, DM Martins Research partners with EPB Macro Research, and has collaborated with Risk Research, Inc.

DM Martins Research also manages a small team of writers and editors who publish content on several TheStreet.com channels, including Apple Maven (thestreet.com/apple) and Wall Street Memes (thestreet.com/memestocks).

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPY, VIXY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The opinions expressed in this article are my own and do not reflect the views of EPB Macro Research and its members.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (3)

3259 profile picture
02 Aug. 2022
Is there something similar to VIXY except for Nasdaq instead of S&P 500?
I have been buying around 15 and selling around 20, has worked out well so far. Not getting rich, but an easy way to build some dry powder. But you are correct, not a long term investment.
tikigod18 profile picture
Very interesting, but maybe a bit late. In January, a LARGE block of the June VIX calls at the $40strike were bought. Now THAT would have been a good trade! I am now looking to short the VIX for a short term bounce.
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