short VXX short XIV

Pairs trading: short VXX and short XIV

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I have had several requests to do an analysis of a pair trade with the position being short VXX and short XIV.   The idea behind the trade is to take advantage of the compounding effects caused by XIV’s daily reset feature that cause it to diverge from a true short.    For example if VXX goes up 20% one day and then down 16.7% VXX is …

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