"Market correction timing is tough..."
Totally agree with that.
Its much easier to detect intra-day reversals of .10 cents
if you follow the SPY and UVXY chart closely,
but timing the big market pull back is really really a magic.
In general, I'm just looking for .10 cent moves with 3000 shares
for $300 profit, so if it pops to $6.35 in AH, I prefer to dump it
and pick back up in the morning.
In the last 10 days, UVXY has averaged about .83 cent difference
between the low and high. So scalping .10 cents in one direction
or another has not been that difficult so far.
I started with 1000 shares when I didn't know much about the
trading pattern, but I've gradually increased it to 3000 to 4000
shares per trade now.
2 to 3 successful flips get you $600 to $1200 a day on this.
So far this has been fairly reliable, and I'm crossing my
fingers that this volatility and up/down swings continue
for a while.
I did get kicked out with stop limits several times in the past
couple of weeks but each time with less than $100 loss, so
risk/reward ratio has been pretty good.
In my other IRA account, I also have $6.30s which I've been holding for several days now. Bit of gambling and getting bit
antsy since markets doesn't seem to want to tank just yet,
but if 5% to 10% fall occurs in May, I'm hoping UVXY will spike
to...gosh let's just say something high...hate to mention any
numbers and have people shoot it down.
That said, I fully respect sting and DrContango's comments
on eroding time value on UVXY, but so far, UVXY has held this level for a week despite market rally in past 5 days...
to my surprise.
Normally (not always), when market rallys the VIX seems to drop
and VIX spikes and when drops,
but I think in current situation, rallying at the peak is
stirring up some amount of volatility as there are enough sellers
betting on the reversal pull back.
