I capitulated on a bear put spread in VXX.

music selection:  “With A Little Luck” — Wings

On 12FEB2020, I entered the 16/17 strikes VXX bear put spread (28FEB2020 expiry) for 92 cents a share.  I bought 20 spreads.  On 20FEB2020, I began to rethink the wisdom of a short term trade in contango with such little upside potential and asked 96 cents to close the spreads.  I got that on 5 spreads and probably should have taken 95 cents to close the entire lot.

Corona Virus has the markets in a nose dive and VXX is spiking.  Now that the spread is completely out of the money, I decided to take anything I could get rather than risk a 100% loss.  I got 29 cents for the remaining spreads today.  My net loss is 1,795 on 1,840 capital at risk.

I continue to hold the underlying shares short and will continue to hold my 13 strike put with 21JAN2022 expiry.  I expect both to finish well in the green by the time I close them.

I don’t like blogs that report their winning trades and just sweep the losing ones under the rug.  I think that gives a false sense of what can be achieved (and what is at risk) with active portfolio management. I think my overall results speak for themselves but it is also clear that I am a fallible lizard who sometimes steps in bronto sp. poo. Hope you find the transparency useful.

Devour your prey raptors!

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Corona Virus strikes the Raptor

Never miss another opportunity to devour prey!

2 thoughts on “Corona Virus strikes the Raptor

  • February 25, 2020 at 9:40 pm
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    I submitted an order for a VIX bear put spread yesterday, but did not catch a bid. Good thing in hindsight! However VIX rarely hangs out at these high levels for long.

    Reply
    • February 26, 2020 at 2:58 pm
      Permalink

      The BPS was essentially done for after the previous day’s price action. The conventional short and the long dated put look like sure bets to me.

      Reply

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