Okay, so lots of discussion about market volatility and what might happen if the market has a vicious pullback. Will we all be lamenting the missed opportunity if UVXY spikes to $120 because the market loses 20% in a week?
Well, for anyone who felt that the market simply MUST pull back, you know the pain over the last five years of holding UVXY or any other long volatility instrument while the market always goes up...no matter what.
But guess what!!!!!!! If that happens, and you're not in a long vol instrument, you haven't missed anything.
UVXY has an alter-ego. An instrument that is your friend... UVXY is your enemy (except for very short term trades). In fact, there are two friends: XIV and SVXY. When the market pulls back enough that these instruments are CUT IN HALF, then you can get in. The dynamics that create the slow march to zero on UVXY now is working in your favor. Day after day, week after week.
Do your own analysis, but from what I can surmise, you can regularly get 30-50% or more on your play when these instruments get smashed.
This should only be done with risk capital. Money you can lose. Why aren't these touted more heavily? Because when they are way up, they can get killed. But after they get killed, getting in can be a very good thing to do.
Basically, you don't have to get lucky and try to time the crash that may or may not happen.
This should give you some additional information: http://greyenlightenment.com/svxy-strategy-part-2/
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