Trading Volatility recently celebrated 10 years of providing indicators for volatility ETPs (SVIX, XIV, SVXY, VXX, UVXY, UVIX) to retail traders and professional fund managers.
Through the use of our indicators, we have been able to capitalize on changing market dynamics, including the great bull runs of 2016 and 2017, the 2018 "volmageddon" event, and the 2021 pandemic panic.
2023 has been another successful year for shorting volatility. So far, our indicators have outperformed nicely (through June 12) with four SVIX trades.
- Our VRP+VXX Bias: +94%
- SVIX (buy and hold): +69%
This performance was driven by 4 trades (one still in progress), with statistics captured below.
Over the past decade, we have repeatedly written about our volatility strategy and why we believe it is superior to any other trading strategy out there. It is worth reiterating here:
- We place swing trades, which amount to ~20 trades per year.
- We focus on the single asset class of volatility ETPs: $SVIX (inverse volatility) and $VXX (long volatility).
- Our strategy is relatively easy to replicate with automated preliminary notifications sent at 3:46 pm ET when we are about to place a trade at the close.
- The investment vehicles are highly liquid, making it easy to trade in size without causing significant market impact.
- High reward comes with high risk. As you may have heard volatility ETPs can exhibit volatility themselves.
- It is crucial to take prompt action upon receiving a trade alert, particularly after a sell signal, to avoid substantial drawdowns.
- Psychologically, executing trades consistently can be challenging for many individuals.
Sounds promising. Are there any considerations to keep in mind?
Many investors tend to overcomplicate trading, bombarded daily by the latest stock trends, thinking they can profit by chasing memes.
If your performance is lagging and you seek to simplify your trading approach, now is an opportune time to reflect on your strategy and make necessary adjustments. For more information, please visit our Strategy page.
We have extensively discussed why we favor volatility ETPs. This preference stems from their trading mechanism based on ever-shifting VIX futures weighting and their performance influenced by term structures. Since this concept may be unfamiliar to many, we have provided comprehensive write-ups and even offer a free e-book, along with the #1 rule for volatility ETPs.
To explore our subscription options, please visit our Subscribe page. Given the valuable information provided, our subscription prices are remarkably affordable. Additionally, for those hesitant about long-term commitment, we offer day passes with full access to our site for as little as $5/day.
All in all, this year has been remarkably fruitful, and we eagerly anticipate what the future holds. Join us on our journey and witness firsthand the incredible potential our subscription offers. Subscribe now and embark on a path to trading success!
Hypothetical and Simulated Performance Disclaimer
The results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. Hypothetical and backtest results do not account for any costs associated with trade commissions or subscription costs. Additional performance differences in backtests arise from the methodology of using the 4:00pm ET closing values for SVXY, VXX, and ZIV as approximated trade prices for indicators that require VIX and VIX futures to settle at 4:15pm ET.
