VXX open position

[Crazy ayzo]

Kim,

I was half way through reading all the VXX material on the site last week when the market went crazy.  

I bought 30 OTM put contracts last week when Volatility spiked.  It's only been a few days and I'm up nearly 100%... killer return for a few days.

My thesis when I was making the purchase was that the common wisdom expects the markets to stabilize after the midterm elections.  Following the template of your earnings call trades, I picked the expiration for two weeks plus a few days beyond the event.

If I'm right, and VXX returns to the high 20's... I make a fortune.  This trade seemed too easy.  I've read and re-read all the training this weekend.  Is there something about VXX options that I'm not grasping that's radically different than stock options?

 

[Kim]

What is tricky about trading VXX is timing. Yes, it goes down over time, but if your timing is off, you can easily lose 100%. This is why our Creating Alpha strategy is using collars to reduce the risk.

[Crazy ayzo]

Kim,

I watched my VXX Puts give up 80% of the gains over the weekend.  I'm still optimistic, but I'd like to model the price of the PUT aging.  Do you have a recommendation of what tool to use to do this?

[Kim]

ONE software.