Jeff 11:48 am on Monday, October 23, 2017
Tags: LongPutDiagonals ( 56 ), VXXGame ( 769 )

VXX Gaming

#VXXGame STO $SVXY Nov 17th 90 put for 1.87.
#LongPutDiagonals BTC $VXX Nov 3rd 43 put for 9.35. Sold for 6.70 on a roll.

First SPX down day in several, but VIX and VXX products not showing much interest.

hcgdavis 11:57 am on Monday, October 23, 2017

I think the way to play SVXY/UXVY XIV/ VXX is set up positions on volatility spikes and not sell short terms calls or puts against it. They just get in the way and cap gains.

Next vol spike I am going synthetic long on SVXY then just let it ride.
- Jeff 12:07 pm on Monday, October 23, 2017
  
  It certainly can be confounding. But what you’re describing is what many of us have done for years… Iceman figured it out first then we all followed him. Sell volatility on any spike; keep selling as volatility rises. Selling naked options can get hairy during a decent correction, but provided you manage your risk correctly it has always come back to earth within a few days. It has worked well since the 2009 bottom. It would not be easy to manage in a 2008-like correction, however.
  
  Selling the other side (SVXY calls, VXX/UVXY puts) can work during volatile times, but then becomes very difficult to roll/manage once the volatility ends.
  - hcgdavis 3:32 pm on Monday, October 23, 2017
    
    My synthetic will have a disaster put on SVXY or a disaster call on UVXY for those 2008 and 8/24/15 days.
Jeff 12:27 pm on Monday, October 23, 2017

I spoke too soon… NOW we have some interest from the VIX.
- hcgdavis 3:38 pm on Monday, October 23, 2017
  
  I think XIV and SVXY have been one of the best performing tickers this year. I have been reverse engineering Fishbacks system. Looks like it uses contango/backwardization of the /VX futures as the trigger to switch XIV to VXX.
  
  He has asked me to share my trades (we still email occasionally) but don’t want someone commercializing what you guys figured out. However I will see if he is willing to share the trigger with the group if we provide some trades examples.
  - hcgdavis 3:40 pm on Monday, October 23, 2017
    
    Could be another tool and maybe help capitalize on the huge spikes.