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posted on 04 February 2018

Why Our Recent Bet On VXX May Be Our Last For A While

Written by , Rick's Picks

We’ll quit while we’re ahead, having ridden calls purchased a couple of weeks ago for 0.36 to as high as 3.80 on Friday. That is more than a tenfold increase. Over the last eighteen months or so, we’ve logged four very profitable trades in the little sonofabitch and four small losses.

vix.swings.2017.aug.2018.feb


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The trick lay in becoming increasingly picky about our entries. The last coincided with the 26.32 target shown. It was sufficiently clear and compelling that it cried out to be bought, and so we did.

Click for large image.

The trade took longer than we might have expected to get airborne, but once it left the launching pad there was little doubt about its potential. Subscribers were advised to cash out half of their positions when the option price doubled a week ago, leaving them with at least one contract to swing for the fences. This will likely be the last time VXX {iPath® S&P 500 VIX ST Futures™ ETN (NYSE:VXX)} appears on the touts page for a long time, since there are no downside targets remaining that are remotely as enticing as the one we just used.

Indeed, anyone betting on a volatility spike in this vehicle based merely on a hunch has better odds of picking five winners in a night at the races. And incidentally, if VXX pokes its little snout up on Monday morning because the S&Ps have continued to implode, beware of a possible top at 33.99.


If you don’t subscribe but want to join in the fun, click here for a two-week free trial to Rick’s Picks, including access to a 24/7 chat room that draws great traders from around the world.


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