Disclaimer

By browsing and reading content, links, feeds, email notifications, or any other information or service provided on this site, you agree to the
Terms and Conditions of Use

Search This Blog

January 28, 2014

$VXX Weekly Trade

  • Strategy: Bear Call spread
  • Underlying: VXX
  • Trade: SELL TO OPEN VERTICAL VXX 100 FEB 14 52/57 CALL @.38 LMT
  • Trade Price: .38¢ credit per spread
  • Margin: $4.62 per spread
  • Return on Risk: 8.22%
  • DTE: 24
Risk Profile:

Trade:

Comments:  VIX spiked from 13 to 19 since last week and now it's come down to 16 level. VXX is a product of VIX that goes up when short term volatility is higher than longer dated VIX contracts. Volatility had a big move up as investors panicked and bid up premium levels. This may be a decent opportunity to fade this move in VXX. Our goal will be to get full credit and if P/L goes -1.5X initial credit (.38 X 1.5 = .57 loss) we'll use that as our potential stop out level.