Update VXUP and VXDN were terminated on September 8th, 2016. They never accumulated enough assets to be financially viable. The naysayers on these funds were right—there was no way these funds could perform the way their prospectus or marketing materials suggested. They didn’t understand (and didn’t bother to learn once it was pointed out) how their funds would be arbitraged against VIX futures in such …
Most IRAs will allow buying puts (assuming you get the appropriate approvals), even if you don’t own the underlying in the account. This opens up the field for speculative uses of options, in addition to the buttoned-down protective put strategies. Recently I had deep in the money puts and OTM covered calls on SPY in my IRA account. As expiration approached I …
The biggest downside of covered calls is their lack of downside protection on the underlying. A big, but not unusually big correction can wipe out many months worth of profits. One strategy for reducing this exposure is to buy puts, but when I have looked into this strategy in the past the puts were either so expensive they ate up all the profits, …
VXX options offer ways to take either long or short volatility positions. Unlike most securities VXX tends to go up when the market is down—which leads to some signficantly different options characteristics. Comparing VXX options to VIX options: Similarities: Both are ultimately based on the Cboe’s VIX futures Will show a strong reversion to baseline behavior when the market is behaving itself—the VIX index and …
Free delayed VIX option quotes are available from: CBOE (Symbol VIX, enter symbol in quote field on left side of the page), check “list all options” radio button and submit Yahoo provides VIX index quotes (symbol ^VIX) and options quotes. The VIX option symbols listed in the CBOE option chains have an “-e” at the end. This indicates they have a European style exercise. Unlike typical …
