Looking at the long term charts of UVXY, TVIX, SVXY, VIX futures, etc. it looks like there is literally no way you can lose money shorting volatility, unless you have the monumentally bad luck of getting in a few months before a major crash. However, crashes don't just come out of nowhere. The 2000 crash and the 2008 crash both saw slow slow upticks in volatility leading up to the crash. It seems like you should just be able to cash out if things are getting seriously hairy (as they very clearly were in 2007 and early 2008).
Right now I can think of literally nothing that could bring on a market crash within 1 year from now (again, unlike 2007 and 2008). VIX looks very clearly headed below 10. 13 of the last 15 days have seen red daily candlesticks on VIX.
It seems to me that VIX futures are primarily used as a hedge against a crazy unexpected market crash. People spend money purchasing "insurance", and as such, if I sell short volatility, I am effectively the insurance salesman. There is literally nothing that could bring on a crash within the next year. With that in mind, is there literally any danger whatsoever in shorting UVXY?
Submitted September 17, 2017 at 06:29PM by UrbanIsACommunist http://ift.tt/2haRsFf
