Mike Philbrick
HBP S&P500 VIX Short Term VIX ETF
HUV-T
DON'T BUY
Aug 01, 2019
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.
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.
During extremely volatile periods it can rally massively, however in the long run you are going to lose significant amounts of value. It works great when you buy it and then the markets go down. He does not recommend it except for the most extreme professional market timers.
Play on the VIX. People buy the VIX as protection when they think a correction's going to happen. It's a trading instrument. Problem is your money's stuck if the correction doesn't happen right away. Instead, reduce your equities or sell some calls.
Over the long run, these will lose you money. As markets go up, these things go down considerably. It is not for the faint of heart. In a risk off market, these can run 10-15%. You must be able to time markets perfectly.
Extremely unlikely we will see hyper inflation. The underlying economy is not strong enough. From a seasonality perspective, you could get some volatility hedging but there will be no hyper inflation. Not good for long term. Good for short term tactical.
A leveraged ETF on the VIX. A crisis asset to have in your portfolio. During covid sell off, you saw a spike of 200%. You must be diligent in rebalancing. Sell when it is up. Rebalance into the down movement as well the whole way down.
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