Although Not Great Last 12 Months
I’m the first to admit that I’m no GG. My trades dont vary a great deal but they make money. UVXY has a ridiculous contango and Long Term Puts way outside the money are my favorite way to keep profits coming in.
I continuously buy $5-$10 Puts 8-11 months out. For instance, last month I bought 50 1.17.20 10 Puts for $.20 and just started buying $5 3.20.20 Puts. I was fortunate enough to grab 25 at $.02 (on the 3.20.20). I realize there is a concern for the $5 Puts when UVXY reverse splits but that has, at most, cost me 5-7% and I have yet to have a ROI of above 10% on these trades.
Currently at $27.29 and an average monthly loss due to contango of 5%, there is still a good chance we see a reverse split this year. I really thought for a while that annual streak may come to an end.
In short, a stock that is down 99.5% since inception (adjusting for the reverse splits the price of UVXY was right around $27550 in October of 2014) is NEVER going to be anything but a loser for the long term. Yes, it may pop here and there but even this year (after is reverse split) although it got as high as $94.95 in mid-December but has since lost 71.25%. Understand that is the norm with UVXY not the exception. Another drop of 70-75% will take it down to around $7.50 in six months. At the very least the Put will appreciate due to the expectation of this drop.
If you open these trades there are some days it seems like a terrible idea and will drive you nuts (for instance the value of the Put seems to go down on days UVXY has big losses) but in the end if you continuously open Puts 9 months in the future you will earn a very healthy return.
As I said earlier, I’m probably the dumbest guy out here but my thought is if something works stick with it. If you are looking for an investment that should give you reasonable upside return on a consistent basis, there is no better trade.
Grubby the Dummy
I continuously buy $5-$10 Puts 8-11 months out. For instance, last month I bought 50 1.17.20 10 Puts for $.20 and just started buying $5 3.20.20 Puts. I was fortunate enough to grab 25 at $.02 (on the 3.20.20). I realize there is a concern for the $5 Puts when UVXY reverse splits but that has, at most, cost me 5-7% and I have yet to have a ROI of above 10% on these trades.
Currently at $27.29 and an average monthly loss due to contango of 5%, there is still a good chance we see a reverse split this year. I really thought for a while that annual streak may come to an end.
In short, a stock that is down 99.5% since inception (adjusting for the reverse splits the price of UVXY was right around $27550 in October of 2014) is NEVER going to be anything but a loser for the long term. Yes, it may pop here and there but even this year (after is reverse split) although it got as high as $94.95 in mid-December but has since lost 71.25%. Understand that is the norm with UVXY not the exception. Another drop of 70-75% will take it down to around $7.50 in six months. At the very least the Put will appreciate due to the expectation of this drop.
If you open these trades there are some days it seems like a terrible idea and will drive you nuts (for instance the value of the Put seems to go down on days UVXY has big losses) but in the end if you continuously open Puts 9 months in the future you will earn a very healthy return.
As I said earlier, I’m probably the dumbest guy out here but my thought is if something works stick with it. If you are looking for an investment that should give you reasonable upside return on a consistent basis, there is no better trade.
Grubby the Dummy