I sold my UVXY puts in the tIRA account.
music selection: “Shepherd Of Fire” — Avenged Sevenfold
I now hold no UVXY puts. I’ll re-enter the position after tomorrow’s reverse split.
On 7DEC2016, I purchased 35 UVXY puts at the 6 strike and 18JAN2019 expiration. I paid 3.90 a share. After a nice move for volatility, I was able sell the puts for a good profit today. I received 4.30 a share. The trade was in force for 35 days and yields 106.96% annualized.
UVXY attempts to track double the daily movement in the VIX index by rolling the 14 and 40 days futures on a daily basis. Contango in the futures market, cause the fund to repeatedly sell a “cheap” asset to buy an “expensive” one. The double leverage compounds the folly. The result is an ETF that declines approximately 90% per year. I’ve found great success by betting against this dog with long dated out of the money puts. I hope to continue with the trades many times in the future.
Devour your prey raptors!