One of the mistakes that sends many traders to our option mentoring is the trading of VXX. Shockingly there are traders that think this ETN should perform the way the VIX performs. ?This is clearly NOT the case. ?Today the VIX closed 14.39 up 1.03%, the VXX on the other hand closed unchanged to 21.58. ?VIX is up a touch less than a point from the open on Monday. ?VXX is actually DOWN from that open on Monday.We can actually see the differences in a visual tick by tick chart of VIX and VXX.
Here is a chart of the VIX over the last two days
Livevol (R) www.livevol.com
Notice its definitively up since Monday.
Now take a look at VXX
Livevol (R) www.livevol.com
Talk about spinning wheels in place on this name. ?Its DOWN from Monday’s open (up from Friday’s close, but that would have mean buying it Friday on the VIX lows).? Despite VIX being up pretty big today, this name went now where.
The Trade:
This is a DAY TRADING product. ?The only way to trade this name long term is to be short it, especially when futures are in contango as they are currently. ?If you are looking for VIX exposure, ?April VIX options or futures make MUCH more sense. ?I am now short VXX small.
If you want to learn what all this means- ?This is the type of information we will train you to analyze in our?gold course. ?If you needed help following this trade, you should be in that course. ?Call us at 888 Trade 01 and ask for Taylor or Joel.