ProShares Short VIX Short Term Futures ETF (SVXY)

[37thirtyseven37]

Correct - call it, purchase the stock, and own it, or simply resell the contract depending on how things play out.

That’s what I had always read and seen from experience. That the fee is essentially ‘invisible’ it’s worked into the resets of ETF which are daily or monthly depending on which ETF.

Option contracts are based on the price of the ETF so if the stock is $100. The call option for $110 is out of the money and let’s say .20-.25 (bid/ask) or $20-$25 a contract for a 30 day.

20 days in the stock is at $110, now my contract price is in the money, $1.2-$1.3 or $120-$130 per contract.

If I bought $.30 and sold at $1.3 a contract, I would profit $100 a contract. Minus the broker fee ~$6.99 + .50 a contract in and out.

There’s no extra ‘premium’ that you have to pay for purchasing an option contract for ETF.

Obviously theoretical numbers and a nice play out.