When investing in Leveraged Volatility ETF's, one should rarely make it a hold for more than a few days to a couple of weeks. They suffer from high internal costs & and also from straight up Decay in value. As you can see, long term holders (Only the last 1 1/2 years) have lost 99% of their value and will likely never break even, unless the market drops 50% and the VIX hits 100. Since these trading vehicles invest in front month futures, keeping a 30 day maturity, they are buying more expensive futures every single month, no matter how the previous month fared. As $uvxy and $tvix drop in price each time they then rise they are further and further in the whole needing a larger rally to get back to even. So to break even after buying $UVXY in JANUARY 2013 you would now need a 500% gain from here to get close.
These ETF's are constantly losing value if the VIX stays FLAT or if it goes down. They only make money when the VIX rises, which is much less often.
SHORTING these leveraged ETF's is a risky thing, but a very profitable trade when done within strict parameters. Join @VIXTANGO to get entries and exits for every single trade and take advantage of these inefficient trading vehicles.
These ETF's are constantly losing value if the VIX stays FLAT or if it goes down. They only make money when the VIX rises, which is much less often.
SHORTING these leveraged ETF's is a risky thing, but a very profitable trade when done within strict parameters. Join @VIXTANGO to get entries and exits for every single trade and take advantage of these inefficient trading vehicles.