1307.9 closed and out.
1307.9 closed and out.
This is a fine conundrum
The only place to move money Today is USA so USD is going to surge
But the biggest discount lies in China and EM
Gold will still hold
Green all the way
Should buy oil now
SP500 - 2700 didnt hold. surprise surprise
VIX from 15.10 up 15%
VIX through IG (Feb-19) only up 8%
That’s a 7% lag -
As far as spreads go this one is pretty big
Essentially only 1 point increase.
So VIX only worth playing with huge VIX spikes (either way)
Great call. Well done.
But I think you highlight the problem with SB. You have the ability to trade the underlying.
1309.13 gold short
True, Options are ideal but I dont see any huge rise in VIX at all at this point so I didnt enter at all.
VIX to shoot up to again has to have a secondary layer of something on top of jittery equitiies - I dont think Stocks alone can create big volatility this season.
1314.79 gold short
You pretty much nailed it. Options are not easy, however, if you kept copious notes on trades, it is a possibility
I purchased my Feb VIX Long, spot price was 15.87. Feb long at the time was 16.77 (+0.9).
I was holding to test several things out:-
b) How futures are affected with spot price changes
c) Greed V’s Price Increase Expectations
a) Although rollover is advertised as free, there is a price to be paid in the difference in closing price to evening price of March 19. This was expected.
However, the price difference was 0.1 which equated to approximately 30 days overnight funding. I’m not saying it’s expensive or cheap as 0.1 could have been the natural price movement of spot.
Will keep a closer eye on this next time.
b) Interestingly, when spot was 15.87, Feb futures were 16.77.
As spot dropped to lower 15’s (no exact record kept) but as a rough guide spot hit 15.35, I expected Feb futures to be 16.25 (+0.9) but they were +1.1 above spot at 16.45. I felt cheated. It was the same price on 2 platforms, IG Trading & Plus500.
Later, VIX Spot hit late 17.55 but Feb futures were now 17.85 & just + 0.3 over spot.
So not only am I buying 0.9 over spot which is acceptable as it’s futures I thought, but when you should be hitting big profits, your 0.6 worse off which in this case was near on 3.6% cheated.
As you say BA, you need massive swings. Your risks remain present but profits are squeezed.
c) I see holding a position of merit to the greed. Especially if you don’t cross rollover. Overnight funding is small in comparison to the position but “if” rollover is always about 0.1 the position, it is better avoided.
In summary, I need more data. There’s a sort of lag between spot & futures which acts like an elastic band. The gap between spot & futures is not fixed, it extends and contracts.
Excel should prove useful to see if it is consistent at certain spot prices v futures.
Then one could work the pinch points. However I suspect the lag is more determined by price movement imminently prior.
Of course, the lag reducing from 0.9 to 0.3 for a long position would have been interesting for the short position.
So when spot increased sharply, long price went from spot +0.9 to spot +0.3.
Short position went from spot +0.8 to spot +0.2 which was very tight. There is not much they can pinch if it does contract.
Very good - looking after returns will definitely make us richer.
Trading VIX through SB has some positives - it is
. Easier than other instruments
. 25% swing in direction of your trade is good.
. VIX doubling in a week (does happen)
You dont have to trade VIX as a commodity - use it as Gauge.
. VIX swings is a good chance to trade main US indices and haven assets
. Main indices arent cheaper than VIX but haven assets - Gold, Silver will give good 10-12 point “safer” bet.
Thanks BA, that is very helpful info
1312.76 limit closed.
1314.04 gold short.
1308.07 gold long
1306.82 gold long
I thought you might be interested in these @BrownAdder
https://www.digitalfinance.org/ their Twitter might be worth following.
OakNorth ( I own a tiny slither of their debt)
The British challenger bank says the total investment in the four-year-old firm now tops $1bn.