UVXY is obvious

1 Okt 2020

"Everyone" is UVXY long. Rarely "Everyone" makes money. Tread lightly.

The UVXY is the "ultra short VIX ETF"... it is a derivative of the VIX which is a derivative of SPY options which are a derivative of the SPY which is a derivative of the S&P 500 index. The VIX measures "implied volatility" which is the pricing of options. People want to buy options to hedge against uncertainty so when the DEMAND for options across the market is UP the VIX is up.

If you go long UVXY you are taking a leveraged bet that volatility/uncertainty/fear will increase. I would say that "betting on volatility to increase going into the election" is a logical thought that most people are thinking right now. I don't like trading what "most people are thinking."

I look at what everyone else is doing... and if I like the risk/reward... I do the opposite.