Contango be damned... the VXX is popping today...
… creating an opportunity to sell calls??
More VXX to chew on - shorting calls on the VXX
If you looked at my previous posts, we tried to track the trail of the VXX and what it really means. My first trade on the VXX was in Q4 of 2011, when I decided to short or sell at the money calls on the VXX. Fortunately, the VXX is a pretty liquidity security and the options trade as well. Why would I do that? When you sell options, you are “short volatility”, i.e. if volatility...
Here comes Contango
Okay, VXX is in Contango. Expect 3% monthly declines in the product. This is au naturel! Of course, as a reminder, when the markets go crazy, VXX could pop and as my friend Vincenzo says, “you can get your face ripped off!”