It’s tough right now to get returns above 1% a year right now without taking significant risks. For example ten year treasuries are running around 2% without much upside and a lot of downside. Stocks paying dividends of 2% or more are common, but they will track a general downturn. Typically quality high dividend stocks won’t decrease as much as other stocks in a downturn, but …
Nassim Taleb crosses over into foreign affairs with The Black Swan of Cairo. He takes the position that in political, as well as financial matters that attempting to eliminate volatility increases the likelihood that nasty Black Swan events will occur.
I sold a S122/S123 spread today with 14-Oct SPY calls this morning for a credit of 0.20. SPY was trading around $118.65 at the time. $122 is about at the top of the trading range we’ve been in since August. The put spread that was equidistant from market price, the S115/S114, was offering a significantly lower credit—0.14. This is not surprising because of the typical …
ProShares was the first Exchange Traded Fund (ETF) provider for volatility based funds. The previous volatility entries from Barclays (e.g., VXX & VXZ) were all Exchange Traded Notes (ETN). Click on the underlined ETF / ETN for discussions on how these types of securities work. Proshares has done well and currently has the most assets in the volatility ETP space. UVXY (1.5X long) and SVXY ( …
It hasn’t been a good ride for Barclay’s IVOP. It was introduced September 16th at $20, and now 19 days later it is trading at $11.4— a 43% drop. Since IVOP is a effectively a short on volatility instead of tracking daily percentage moves like its competitors (e.g, VelocityShares’ XIV) it has a variable leverage behavior. With VXX currently at 58.5 IVOP’s …
