Friday, 16 August 2013

TVIX, UVXY - ending the week marginally lower

Despite the main indexes closing the week with further moderate declines, the VIX still slipped. The 2x Lev' (bullish) VIX instruments of TVIX and UVXY saw Friday declines of around 2.5%. Across the week, the VIX saw net gains of 7%, but remains in the lowly 14s.

TVIX, daily

UVXY, daily


First, the weekly VIX chart..

So, the VIX saw net weekly gains of 7%, but the VIX remains at bizarrely low levels. Clearly though, equity bears do have the second consecutive weekly gain for volatility.

That does bode well for the rest of August and first half of September. Certainly, VIX looks likely to spike into the 20s..if only briefly, in the coming 2-4 weeks.


For the leveraged VIX players meddling in TVIX/UVXY, the problem remains the same. The VIX remains at a bizarrely low level, and even a Dow fall of over 200pts on Thursday wasn't enough to kick the VIX beyond the high 14s.


As ever, with the statistical decay issue*, such lev' instruments are only for very short term trading.

*for the record, I have never meddled in TVIX/UVXY..or the VXX, for largely that reason. I have actually found VIX calls (although highly volatile, and with the proverbial 'detonator clock), far more useful.