The Negative Drift of VXX

VXX has been a hot topic on the desk at SMB during the recent increase in market volatility. If you aren’t aware, the VXX is an exchange traded note (ETN) issued by Barclays that has the objective of following the cost of owning implied volatility. The biggest challenge with owning implied volatility is that implied volatility has a limited shelf … Read More

Another Great Look at an “Income” Trade

After holding a couple of free live webcasts over the past month discussing earnings trades and adjustments (click here for latest webcasts), here’s yet another look at an “income” type of trade.  This one popped up as a trade yesterday as the VIX starting pushing 15.  But the reason for the move up in volatility becomes a two-edged sword.

Recording: Greg Loehr: Trading Broken Wing Butterflies When the $VIX is in the Basement

SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by veteran options traders and experts in the world of options trading. In this presentation, Greg Loehr of Optionsbuzz.com discussed the … Read More

In a Market of Volatility Hidden

Yesterday I was a panelist at High Frequency Trading World USA 2010 in NYC where we discussed HFTs effect on market volatility.  Some are concerned that a market overly volatile will scare investors from participating in the market.  Since HFTs are our modern middle men, perhaps market maker rules should be considered for them.  This is an idea worth exploring but will not change … Read More