Thursday, 3 July 2014

TVIX, UVXY - the horror of decay continues

With US equities seeing yet another week of gains, the 2x lev' bullish VIX instruments of TVIX and UVXY saw net weekly declines of -11.8% and -11.5% respectively. Near term outlook is for more of the same, not least whilst VIX is unable to even spike into the low teens.

TVIX, daily

UVXY, daily


*first an update on the VIX, which saw net weekly declines of  -8.3%.


Suffice to say...the 2x lev' instruments remain in decay mode.

*TVIX is due a reverse split (not announced yet), probably on the order of 1 for 10..or even 1 for 20.


No interest in being long VIX

With equity price action as it is, I have zero interest in going long the VIX. Even if the market slips a few percent in late July (weak GDP?), I no longer see the VIX breaking much above 15/17.

In the scheme of things, there seems little point in long VIX trades (not least for the options traders) for some months to come.