#VXXGame Bought to open $UVXY April 100 calls for .60. I have these for Feb and Mar. Since Feb expire tomorrow adding the April batch. Will be used to sell lower strikes against if we get a re-test.
Bought to open $VXXB Jan 2020 20 puts for 1.75.
A starter position for a 12-month trade. My bigger target will be the 2021 LEAPs, which are still pretty expensive, but should lower in value by late summer, provided we don’t enter a bear market. I may also look at ATM puts and sell puts against them, but this OTM position is meant to be a cheaper play that stands alone without cost reduction.
#VXXGame Bought to Open $UVXY Feb 15th 100 calls for .36. I want to have room to sell premium if we get another market pull back. If we don’t, then small loss. (these reached a peak of 13.00 in late December)
#VXXGame #LongLEAPs Over the years I put a lot of research into the idea of buying long $VXX LEAP puts, since the symbol is dragged toward zero over time. I built an extensive spreadsheet showing how this strategy would have worked with every VIX leap expiration since 2006 except Jan 2009, during the financial crisis. (VXX was created in 2009, but there are models available of how it would have performed going back to 2004).
Other than Jan 2009, the 18-month to 24-month decline in $VXX is usually 60-90%; even as much as 97% down over 24 months.
So when I started buying the Jan 2019 VXX 20 puts on September 5th, 2017, the odds looked pretty good for a decent profit. I started scaling in and ended up with a total of 32 puts over multiple accounts, average price 1.603. I also sold some 50/60 call spreads against it, lowering that cost basis down to about 1.20.
But, guess what? Picked the wrong year! This is the first LEAP expiration since 2009 where this strategy did not work. And now $VXX is going away at the end of this month, replaced by $VXXB, which doesn’t have much volume yet. However, they HAVE finally added LEAPs, so I’ll be looking to start buying.
Also, because of the product termination, I closed my final short shares in $VXX today for 37.25. I was assigned 100 shares short for 27.00, and had managed to scale out of 30 of them when we dipped below 27.00 in September. Then, October happened.
#VXXGame My attempts at legging out of the $UVXY Dec 21st 50/60 call spreads were also a failure, but only a bit worse than allowing them to expire. Sold for 5.68 (avg price), some will expire for 10.00, some closed for 10.60, and assigned short shares on a couple others, cost basis 69.43.
Also, I took off some risk this week without rolling. First we’ve experience a market like this 2008, and I wasn’t trading then. I hold very few short options positions compared to many times in the past, and my remaining short $UVXY calls are hedged with a greater number of long calls, albeit much further OTM.
Suffice it to say the only thing working right now are the 1-day SPX condors. I’m finished trying any more directional positions until market is clearly finished with this. If we go much lower, I will continue to shed positions slowly.
BTC $UVXY Mar 15th 75 call for 16.00, sold for 6.125, avg price, in Sept/Oct
BTC $UVXY March 15th 95 call for 10.15, breakeven, sold for 10.15 in late October.
Closed $SOXL Feb 15th 75 put for 12.70. Sold for 7.00 as a roll.
#VXXgame I had sold $UVXY 50/60 Dec 21st call spreads(for 4.35 and 7.00) in belief volatility would be calmed going into Xmas. Wrong.
On one account, I was assigned short stock at 50.00. I sold the long 60 calls for 12.60 today, and covered stock f0r 71.10, meaning out of the spread for 8.50.
On the other accounts trying to close one of the spreads for 9.30 but not getting filled. I’ll see if assigned tonight and deal with closing on the swings tomorrow.