A.I.M. Users Bulletin Board

[The Grabber]

Thanks Clive.

Whilst VIXY isn't leveraged, it behaves as though it is, around 5x times or so. And has a tendency to be more like a 5x leveraged short stock. That said, when stocks dive quickly so the VIX will rise quickly, such that it is a short term hedge (similar perhaps if you'd held a 5x short stock position at a time when stocks were diving).

I suppose it behaves like a 5x becasue it uses short term VIX options?

Regardless, I added it specifically as a hedge component and it has served me well in that regard.

If the market drops like a stone, I would guess that VIXY could jump 20-50% in a very short time. During August, 2001, it went up by more than 100%.

But you have given me pause to think that a long term position in VIXY is likely not a good thing.

Maybe I need to only hold enough to be at a certain % of my overall SV $. Maybe 20% since it acts like a 5x.
If that portion changes by more than 5 percentage points either way, Buy or Sell enough to get back to the 20%.