• 147 days Could Crypto Overtake Traditional Investment?
  • 152 days Americans Still Quitting Jobs At Record Pace
  • 154 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 157 days Is The Dollar Too Strong?
  • 157 days Big Tech Disappoints Investors on Earnings Calls
  • 158 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 159 days China Is Quietly Trying To Distance Itself From Russia
  • 160 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 164 days Crypto Investors Won Big In 2021
  • 164 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 165 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 167 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 168 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 171 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 172 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 172 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 174 days Are NFTs About To Take Over Gaming?
  • 175 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 178 days What’s Causing Inflation In The United States?
  • 179 days Intel Joins Russian Exodus as Chip Shortage Digs In
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

VIX Strategy, Maximum Profits $

Proshares UVXY 2x ETF

Everyone wants to find ways to maximize profits and minimize losses. That's part of the game in trading the market. I would consider this an extremely high risk/high reward trade.

First let me explain what the VIX is. The VIX is a 30 day fear gauge calculated from calls and puts. It can be one measure used to gauge investor's sentiment or mental state towards the market. As the VIX goes down the complacency goes up, or in other words a contrarian indicator to some.

UVXY is the ticker symbol for Proshares Ultra VIX ETF. During a market correction or crash as you will see in the chart, there is great movement in the etf.

Some would use this as a vehicle to buy if or when they believe a market correction or crash is coming up. Using leveraged etf's are meant for short term trades only. The value goes down over time, it is almost like an option with premium that decays over time.

One way a trader could play UVXY is to use options and the same goes for the VIX. I have not researched which one would be of better value for the movements using options. Maybe someone out there has but I have not. It is possible that there is greater value in the straight VIX options then its cousin UVXY 2x options.

It is extremely hard to predict a crash, some are able to do it but it is not easy. I would rather use these vehicles after the "event" not before. I will be researching these vehicles and their option counterparts to add to my toolbox as there will always be mini crashes or corrections along the way. The chart below is of UVXY. Notice the great movement in the 2 mini crashes over the last year, there will be more coming up. Be prepared for the next one. Everyone trades the market to make money. This is one tool that deserves attention.

Proshares UVXY 2x ETF
Larger Image

This is for research purposes only, please use your own judgement.

 

Back to homepage

Leave a comment

Leave a comment