03-24-2020, 11:34 AM
(03-24-2020, 11:28 AM)fenders53 Wrote:(03-24-2020, 11:24 AM)Otter Wrote:That was for guru. I know you understand the effect of time and volatility on options.(03-24-2020, 11:08 AM)fenders53 Wrote:(03-24-2020, 10:52 AM)stockguru Wrote:(03-20-2020, 03:01 PM)Otter Wrote: So, on a day when SPY finished down 4.3% on above-average volume, SVXY was up 1.5%. That IV Crush is no joke, LOL.
What about buying SDS?? I was thinking of getting this one today. If the market is headed down another 3-4 weeks this one would be good to be in. Maybe a good time to buy today with the market green lol
Maybe you already know this but it's 2X leveraged and they are using options, so there is time value decay. You need the market to move down significantly and soon. If you try to hold it a month and the market goes sideways or loses volatility, you won't be even. Pull up a ten year chart and you'll get the picture. Most leveraged ETFs eventually go to zero and are liquidated. All that said the market is highly likely to dip in the next few weeks so now would be the time to try it.
100% true. This is all predicated on some big SPY drops happening in the next few weeks, substantially below current levels.
That said, I believe that to be a likely scenario. This is, of course, a high-risk trade (hence discussion in this thread).
Absolutely, and it is good info for everyone. Contango is not your friend (as anyone who played with UVXY for most of the past decade discovered).
On the flipside of this, once a clear bottom appears to be in (to me, it still looks like we are in the volatile price discovery period of a market phase transition, based upon the continued up/down choppy swings), SVXY as a long term speculative hold seems like a winner. Put the long-term trend of the market over time (up) to work on a leveraged basis.