Friday, 6 June 2014

TVIX, UVXY - VIX instruments crushed

With equity indexes breaking new historic highs, the VIX broke new multi-year lows, slipping into the 10s. The 2x lev' bullish instruments of TVIX & UVXY, saw net weekly declines of -19.2% and -18.5% respectively. Near term outlook is for continued suppression of the VIX.

TVIX, daily

UVXY, daily


*first, an update on the VIX, which declined by -5.9% across the week.


So, almost another 20% knocked off the 2x (bullish) VIX instruments this week. For anyone holding long across the week, it was effectively a nightmare.

Worse still, there seems little near term hope of VIX in the mid teens..never mind above the key 20 threshold.

The usual 'statistical decay' factor will further cause TVIX/UVXY to get crushed into dust.

*as many will recognise..the next reverse split (probably 1 for 10, or even 1 for 15) for TVIX is likely within the next month or two.