Replies to post #3018 on ProShares Trust Ultra VIX Short Term Futures ETF (UVXY)

[stingray113]

As long as you have enough buying power to remain liquid off spikes (to do that I would recommend at least 5x the amount invested) then yes, you would "close" to double that investment. Remember it will asymptotically approach $0 in the long run, and when you short your max profit is limited to the price you sold those shares at.

I've laid a much safer and profitable strategy before though. Just go short UVXY and long VXX in equal dollar amounts, rebalancing the first of every month. That way you have a hedge to protect you if UVXY spikes but still retain plenty of downside exposure.

There are plenty of other ways to do this as well. You can park profits in UVXY LEAP puts, etc etc. Refer to my previous posts for exhaustive discussions on this topic.

All with similar returns long term to day trading and much, much less risk. I can show you ways to make 5% monthly using these products in any market condition with very little risk.

[A320CA]

Really? It would be worth next to nothing! $500 in total, maybe.
It has to.

[eric4x]

Don't short bigtime until after debt ceiling crisis.*

I agree with stingray that you have to prepare yourself for a huge spike, possibly a 5 times increase, and that even this is not completely safe.*

The strategy he is using seems complicated, and it would take time to learn it. I don't have the account size to follow either of these strategies. Right now, I am just trying to get experience at the most "beginner" level. I don't know about short-selling from experience, but I have read a lot about it.*

There are many on the Yahoo board who swear by a strategy for UVXY of "short the spikes, and never cover." The only point of dispute seems to be the amount of "cushioning" you need. And I would wonder how this money is held. Is it being put to good use, and yet still available for margin calls or whatever? The problem is that when UVXY spikes, the value of your other stocks would be dropping.*

I would say that you should NOT AVOID watching the market carefully. If you have good reason to believe that a stock you hold will suddenly be dropping in value, you should sell it, right? Likewise, if you have good reason to believe that you will be squeezed in a short-sale, you should cover it before it gets away from you.*

We first have to get past our next debt ceiling crisis, which is "scheduled" for later this summer. Paul Ryan said that it "will come to a crescendo this summer."*

http://www.google.com/#hl=en&gs_rn=12&gs_ri=psy-ab&gs_mss=paul%20ryan%20cres&pq=paul%20ryan%20crescendo%20debt&cp=11&gs_id=6c&xhr=t&q=paul+ryan+%22crescendo+this+summer%22+debt&es_nrs=true&pf=p&sclient=psy-ab&oq=paul+ryan+%22crescendo+this+summer%22+debt&gs_l=&pbx=1&bav=on.2,or.r_qf.&bvm=bv.45960087,d.dmg&fp=25132d1b7f050e52&biw=965&bih=414

After that is settled, and UVXY spikes to some ridiculously high number, ($16 by November ????), then by all means try to do some short-selling. But beware that a market crash could wipe you out if you aren't prepared for the short-squeeze, and if you aren't watching closely for signs of when to cover it.*

Otherwise, without some catastrophic event in the market, you can be sure that UVXY will continue to drop relentlessly. "Short at any level, and never cover."*

For the current circumstance, keep in mind that the recent low of $6.16 was reached on April 24, even though the SPY set a new record high on May 2.*

http://www.google.com/finance/historical?q=NYSEARCA%3AUVXY&ei=RzeDUdjiG5q0lgPUHQ