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.
Comment:
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.
Comment:
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!
Comment:
I will sell more if UVXY drops. Unitl then waiting for the 2xATR move as my mantra Richard Dennis style.
Alas - not a philosopher's stone...
so sad.