UVXY twice average true range trade and triple witching Friday
Today I exited a cash secured put trade. I sell 30 day cash secured puts on the drop and buy these back on a rise like today.
I am not temped to buy the calls today. I only buy the calls when the common rises twice the 20 day average true trading range. (2xATR).
Currently UVXY has a $3.50 average true range based on the precipitous drop after the tenth reverse split.
I try to make money selling a 35 to 45 day cash secured put when the precipitous drop levels off. another way to look at that is a relative calm channel for SPY and RSP over the same period. That is to say, a period where volatility and the cost to roll to the next months erodes the value of the UVXY portfolio. checking the NAV of UVXY adds a bit of cold comfort to the put sale strategy.
This strategy has worked now an 8th time since January 1, 2021. I purchased calls on the MArch 2xATR bump and that was a loss. I enter my forist 2xATR trade every time. I find I have to be in the game to win the game and I do not look for reasons - I simply enter mechanically on the math. However, my first entry is an in the money call vertical. On the rise to $14 pre split I bought a call vertical witht he lower strike at $11 and the upper at $15. The common droopped as SPY and RSP recovered and the trade closed out at a loss.
Perhaps every triple witching Friday UVXY will rise?
I will do a little research on that.
Has anyone done that?
Respond back if you have looked at that as a trade.
It, like Red Bull might have wings..
all the best.
I am not temped to buy the calls today. I only buy the calls when the common rises twice the 20 day average true trading range. (2xATR).
Currently UVXY has a $3.50 average true range based on the precipitous drop after the tenth reverse split.
I try to make money selling a 35 to 45 day cash secured put when the precipitous drop levels off. another way to look at that is a relative calm channel for SPY and RSP over the same period. That is to say, a period where volatility and the cost to roll to the next months erodes the value of the UVXY portfolio. checking the NAV of UVXY adds a bit of cold comfort to the put sale strategy.
This strategy has worked now an 8th time since January 1, 2021. I purchased calls on the MArch 2xATR bump and that was a loss. I enter my forist 2xATR trade every time. I find I have to be in the game to win the game and I do not look for reasons - I simply enter mechanically on the math. However, my first entry is an in the money call vertical. On the rise to $14 pre split I bought a call vertical witht he lower strike at $11 and the upper at $15. The common droopped as SPY and RSP recovered and the trade closed out at a loss.
Perhaps every triple witching Friday UVXY will rise?
I will do a little research on that.
Has anyone done that?
Respond back if you have looked at that as a trade.
It, like Red Bull might have wings..
all the best.
Note
Triple witching has surprisingly little carry through with UVXY and VIX. Alas - not a philosopher's stone...
so sad.
Note
Premarket Monday SPY and RSP up and UVXY down. Will sell some additional cash secured 35 day 30 delta puts. If new to this - 30 delta means a 70% chance these expire worthless. I buy these very low risk puts back and sdell thenm against cash. This has worked now 8 times since the beginning of the year. It is a way to add to cash reserves while waiting for a twice 20 day average true range move upward in UVXY.Note
UVXY has a downward roll bias. If handling institutional money or a very large portfolio - the smart money move would to always be short UVXY. there have been 10 total reverse splits over the lifetime of the ETF. I sell the puts that are 20% below the NAV of UVXY and an additional tranche below that. Never longer than 45 days to expiration. I was originally trapped by selling a very juicy leap put that cost me $9000. This could neveer get that low right? Ha!Note
I will sell more if UVXY drops. Unitl then waiting for the 2xATR move as my mantra Richard Dennis style.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.