Has most of the drama played out?

Thursday, July 28th, 2011 | Vance Harwood

With Greece’s Euro problems successfully extended out a few more months, and the economy continuing to consistently send mixed messages, the focus of fear is the budget cap.  I’m thinking neither party has the stomach for the wholesale disruption of the Treasury’s affairs.   I wouldn’t be surprised to see one more major upswing in the VIX, but right now the prospect of a happy ending plus a favorable signal from Mr Bollinger, has me back in the market with VXX $24 September puts again (at $3.10).

VIX at 2 sigma Bollinger, click to enlarge

Thursday, July 28th, 2011 | Vance Harwood
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  • Andrew

    I’m partially in, have bought some XIV at 16.22 on Wednesday. But my feeling is the drama will keep going on, possibly even beyond Aug 2, and so a dollar cost average approach to entering a short volatility position is warranted. Still, the time frame is compressed and I find myself checking VIX/XIV/VXX a lot at work nowadays…

  • Vance

    Hi Andrew,
    I like the dollar cost averaging approach to XIV also. It counters the unrealistic expectation to be able to pick the peak of fear. I bought some XIV early Friday.

    – Vance


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