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Opinions Keith Richards
HBP S&P500 VIX Short Term VIX ETFHUV.TOTOP PICKApr 18, 2016
Keith RichardsOwned
$22.28
Stock price when the opinion was issued
$7.78
As of Jan 17, 2025. Market Open.
E.T.F.'s
It's the ideal tool to help you make quicker, more informed decisions for managing and tracking your investments.
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PAST TOP PICK
(A Top Pick May 03/19, Up 71%) He had expected that given the market valuation that market volatility had to go up. It had been up 150% at one point.
Ross HealyOwned
E.T.F.'s
DON'T BUY
VIX is an esoteric asset class. What are you owning, and do you understand it? Very few people do. Priced off the options pricing of the S&P, and futures pricing. Be very careful, and manage your position size very diligently. It's a hedging/trading vehicle, so not for the long term. It's like owning a dividend stock, but you're the one who pays 5% every quarter to maintain that position. Remember, vol always ends in zero. Most should steer clear.
E.T.F.'s
TOP PICK
He thinks this could soar if stock values go down. The VIX ETF for market volatility is suggesting investors think this market is going up forever. This is a contrarian trade. Do not hold this for a year, it is a trade.
Ross HealyOwned
E.T.F.'s
COMMENT
It seems not to track the VIX. It does not track the VIX, but holds the VIX futures contracts 2 months out. Every month you lose 5 to 10% due to the leverage and rolling over futures contracts. You can’t sit with these for a long period of time. Hold for a couple of days max for an event that might be asymmetrical.
E.T.F.'s
COMMENT
He does not advocate individual investors playing the volatility index because it is a short term play. Don’t play the leveraged ones. When VIX gests above its own 50 day average and the market violates it. You can expect some follow through selling and a spike in volatility so you can add then to help with hedging.
E.T.F.'s
This is a hedge, insurance against the market going down. He has a 5% position. The VIX is at the bottom of a very long term trading range. The markets are too settled in and too happy. If the market starts to sell off, the VIX will spike aggressively. In a worst case scenario it has a 2 to 1 reward to risk ratio.