Trading Volatility, Ballasted by Gold

[romans holiday 0]

http://www.youtube.com/watch?v=S8QM79i-lXQ

 

Hang about. Weren't you 'all in' years ago? You say you're putting your monthly income in now? But then why the need for a truck? Wouldn't your briefcase suffice for that?

[romans holiday 0]

Wanting to see one last push to 40.

 

 

[jerpy 0]

Wanting to see one last push to 40.

 

LSIL making a bee line for 35, I just know it wants to go there.

[romans holiday 0]

[romans holiday 0]

Only a smidgeon off now.

 

 

[jerpy 0]

There you go Romans.

 

LSIL also nearly at 35 too, expect it any minute. Reckon your thoughts on Silver hitting previous lows though are bang on, so holding fire myself. Silver itself could easily go to 26. This is killing the paper bulls.

[jerpy 0]

Elevator going down Been expecting this, just so wish I'd been smart enough to have shorted it, such is life.

[romans holiday 0]

There you go Romans.

 

LSIL also nearly at 35 too, expect it any minute. Reckon your thoughts on Silver hitting previous lows though are bang on, so holding fire myself. Silver itself could easily go to 26. This is killing the paper bulls.

 

Was a rocky road but got there in the end.

 

In simply focussing on volatility, this is the only instrument being traded. The trade is a very heavy one. By selling at 60 and re-buying at 40, a near increase of 50% [in shares]. But the real object of the trade is to sell on a spike and take gains in US dollars. Half way there for this trade.

 

 

 

 

 

 

 

 

The longer term:

 

[romans holiday 0]

Reverse head and shoulders:

 

 

[jerpy 0]

I was thinking of taking a position for around 4 - 12 weeks. I know that these tracking ETFs tend to have a tracking error associated with them, and this increases as time goes on, so I wouldn't want to hold long term. However, for short term trading, I think they are fit for purpose.

 

With the trend in VIX being down over the last few months, this is definitely a contrarian play. And right on cue, I found this article today.

 

http://www.zerohedge...ebruary-whimper

 

This details how VIX has broken support several times, and suggests the current upwards trend in stocks will continue to push VIX down until around May. The question is, will there be some sort of market shock soon which will cause VIX, and these ETFs to spike?

 

Had a little educated gamble hoping the Italians spook the market, hard to watch though - all over the place.

[jerpy 0]

Had a little educated gamble hoping the Italians spook the market, hard to watch though - all over the place.

 

Feel like I just went for a swim against the tide! Quit to go back to watching mode on UVXY.

[romans holiday 0]

Feel like I just went for a swim against the tide! Quit to go back to watching mode on UVXY.

 

Ah, but tides are predictable..... but can be the cause of momentary and unpredictable whirlpools.

[jerpy 0]

Ah, but tides are predictable..... but can be the cause of momentary and unpredictable whirlpools.

 

Like the Silver wave, just had to come further in

[emel 0]

Feel like I just went for a swim against the tide! Quit to go back to watching mode on UVXY.

 

I've traded in and out of UVXY a couple of times in the last two weeks. Once for a small gain, another time for a +15% gain in less than 24 hours! I'm not sure I have the stomach for a multi-week position, this thing makes AGQ look boring. However, I do believe VIX is too low at these levels. I'm buying again around $10 tomorrow, it looks like it will open below this.

[romans holiday 0]

I've traded in and out of UVXY a couple of times in the last two weeks. Once for a small gain, another time for a +15% gain in less than 24 hours! I'm not sure I have the stomach for a multi-week position, this thing makes AGQ look boring. However, I do believe VIX is too low at these levels. I'm buying again around $10 tomorrow, it looks like it will open below this.

 

Ah, but never underestimate the efficacy of boredom. You know there is no emotion in the trade when you are bored with it... and are free to wander off and focus on other pursuits.

[emel 0]

Ah, but never underestimate the efficacy of boredom. You know there is no emotion in the trade when you are bored with it... and are free to wander off and focus on other pursuits.

 

Very true. And if anything, I think UVXY is too exciting.

[emel 0]

I've traded in and out of UVXY a couple of times in the last two weeks. Once for a small gain, another time for a +15% gain in less than 24 hours! I'm not sure I have the stomach for a multi-week position, this thing makes AGQ look boring. However, I do believe VIX is too low at these levels. I'm buying again around $10 tomorrow, it looks like it will open below this.

 

I ended up buying at $8.81 on Friday, this was simply as I had to travel and didn't get round to it before.

 

Today, there was another downward move, and it's trading close to $8 as a result of VIX being at a 5 year low. That's right everyone, the economy is stable, RISK IS OFF

[jerpy 0]

I've traded in and out of UVXY a couple of times in the last two weeks. Once for a small gain, another time for a +15% gain in less than 24 hours! I'm not sure I have the stomach for a multi-week position, this thing makes AGQ look boring. However, I do believe VIX is too low at these levels. I'm buying again around $10 tomorrow, it looks like it will open below this.

 

This kind of sums it up well for me.

 

This is an in-and-out tool for fast traders, for whom long-term performance is irrelevant. The fund has the bang of big single-day price moves they seek. On Tuesday, as stocks plunged, the fund jumped 16%. In early September, UVXY plunged 20% on a session of modest European sovereign-debt progress. "Rather than going for a quarter-point here and a half-point there, you can make or lose big money," says Bill Luby, an independent investor who has traded VIX funds and notes since the first one launched in 2009. Luby says he won't own UVXY for more than a day or two.

 

The fund's efficacy as a stock-market hedge is debatable, since it is really a bet on volatility futures. Investors looking for an inverse fund are better off using products built specifically for that purpose, or the options market. Short of an informed view on VIX futures, the best use for UVXY may simply be as a barometer of jittery traders' mood

 

<a href="http://online.barrons.com/article/SB50001424053111904034104578066632838398810.html?mod=BOL_qtoverview_barlatest">http://online.barrons.com/article/SB50001424053111904034104578066632838398810.html?mod=BOL_qtoverview_barlatest

[jerpy 0]

LSIL also nearly at 35 too, expect it any minute. Reckon your thoughts on Silver hitting previous lows though are bang on, so holding fire myself. Silver itself could easily go to 26. This is killing the paper bulls.

 

LSIL support lines probably gone in the morning(31.5 !) The 26 for Silver is looking a good call,

[romans holiday 0]

LSIL support lines probably gone in the morning(31.5 !) The 26 for Silver is looking a good call,

 

There you go, 26.99 as i write. Makes you wonder whether we might have to wait until after the summer doldrums for the fireworks.

[romans holiday 0]

Then again, the dollar is nearing the top of its trading range so may see markets turn around shortly

[jerpy 0]

There you go, 26.99 as i write. Makes you wonder whether we might have to wait until after the summer doldrums for the fireworks.

 

LSIL hit sub 22 this morning and almost looked primed to hit 5 year lows, wouldn't bet on it reaching them at this rate, despite a bounce to 24.

[romans holiday 0]

LSIL hit sub 22 this morning and almost looked primed to hit 5 year lows, wouldn't bet on it reaching them at this rate, despite a bounce to 24.

 

Well done on holding off. Thinking of buying here?

[jerpy 0]

Well done on holding off. Thinking of buying here?

 

Bought a small nugget yesterday As for LSIL ok doubt we will go back to 08/09 slide lows, but I'm waiting with funds to see a turn.

 

Have to agree with the gist of many comments floating around, if you don't have paper it's not a big deal.

 

Bit like watching a sports event you don't really follow. Fascinating at times, but in truth, doesn't get the pulse racing

[romans holiday 0]

Bought a small nugget yesterday As for LSIL ok doubt we will go back to 08/09 slide lows, but I'm waiting with funds to see a turn.

 

Have to agree with the gist of many comments floating around, if you don't have paper it's not a big deal.

 

Have mixed feelings about this crash. On the one hand am glad I hedged and sold AGQ on a spike, on the other a little disappointed I bought back too early. Of course, you have to take a pragmatic approach to trading; you are never going to get the bottom, and should instead be looking for a 'good enough' trade. With that in mind, I think the silver price will snap back quickly.

 

Bit like watching a sports event you don't really follow. Fascinating at times, but in truth, doesn't get the pulse racing

 

My main motivation for hedging [trading the volatility] was to maintain an equanimity in an uncertain and volatile market. Feel a bit surprised at the recent move, but not stressed.