Friday, 20 June 2014

TVIX, UVXY - volatility instruments continue to decay

With the VIX slipping into the 10s, the 2x bullish VIX instruments of TVIX and UVXY had another rough week, with net weekly declines of -13.8% and -14.1% respectively. Near term outlook is for the VIX to remain subdued into mid July.

TVIX, daily

UVXY, daily


*first an update on the VIX, which declined a significant -10.9% across the week.


As for TVIX and UVXY, the usual problem remains one of decay. Whilst the VIX is unable to build even a moderate multi-week up trend, both TVIX/UVXY are simply decaying.

*a reverse split on TVIX seems likely within the near term, probably on the order of 1 for 15.. or even 20.

My longer term outlook, is for the VIX to have a 'fair chance' for the upper teens/low 20s by end July, but that is probably more of a hope right now.

As things are, I have no interest in being long the VIX - via an option Call block, until at least July'16.