+ Watch XIV
on My Watchlist
This is another way to get long volatility. Keeping with my themes. Volatility is cheap and I am short bonds, long financials. let it rip
Volatility should be embraced, not feared.
Volatility should steadily decrease with improving economy.
Safer way to short VIX.
This has a fundamental problem with tracking error. That error is not sufficient to keep this from being a safe bet as it is on the right side of contango in the futures market. Recommend a trailing stop loss if you put real money on this as short term volatility spikes can eat up a lot of value quickly. You want to be out when the market is in chicken little mode and in at all other times with this one.
While I like the contango effect of this fund, I think volatility may be due for a gradual rise from these levels, which will severely diminish the performance of this fund.
Going out on a limb here (in real life too) and making a long term bet that the contango effect in volatility futures will continue to benefit this long term. Especially as the volume in trading VIX futures (partly due to ETFs like this and others) seems to exacerbate that effect.If this holds true then this ETN should continue to outperform on a regular basis. Apart from times of extreme volatility like July/August 2011 with the debt ceiling and downgrade where this lost 73% in a few months this should hold true. It's worth noting too that despite losing 73% during the period, it is still up 94% since inception. It took a while to earn that back but still outperformed the S&P 500.
What could possibly be worse than a triple-levered ETF? How about an addiction to volatility-based ETFs. This one's yet another dud.TMFUltraLong
With volatility near historic lows, there is only one way left to go...Inverse (short) vehicles with tracking error tend to gain less as VIX falls than they do as VIX rises, so this one is in for a double-whammy.
Volatilty has trended lower for a very long period, a short on this is a bet against continued lower volatility, & is a bet on rough times ahead
Below 12m High
Added in RL
VIX futures will underperform the market over the long term.
Volatility will revert to the mean, and then this will benefit from contango.
This panic shall too pass. Great opportunity to "short" the VIX! In at 11.30
Seems to inversely track the VXX pretty well - and we know the VXX is a long-term contango loser - therefore over the long haul it should do well. However, this is not for the faint of hear - when volatility spikes for periods of time (which it inevitably does), XIV will drop until both regression to the mean (falling volatility) and contango can have their long-term beneficial effects.
While I admittedly don't know the mathematics behind calculating this inverse volatility ETN, it seems as though, logically speaking, this would be a better way to play the VIX. While you can short the VXX, your potential gain (excluding margin/leverage) is limited to 99.99%. However, by going long the XIV, you are no longer capping your upside, or so it seems.If I am missing a piece of the puzzle here, let me know; this is just how I went about choosing between the two.
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