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This has been an interesting few days, gutted to be on gardening leave at the moment as missing out on key experience but also relieved as it's a lot less stressful from the sidelines. I worry that we may see further contagion across ETFs/ETNs etc especially any inverse products, but time will tell. I'd be surprised if we didn't see CB intervention here.
I read the attached article, interesting for sure. But can you help me interpret this line...
The good news from the effective wipeout of a major part of the vol-selling market is that "this means there is much less risk going forward of further vol to buy from rebalancing of these products."
WSJ :- Born to Die: Inside XIV, the Busted Volatility ETF
Would be better is it was an article rather than mostly twitter posts, but very interesting none the less...
It went up 96% yesterday. Yikes! We multiply yesterday's value by 0.04. That's …
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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Because they are gone. they don't exit anymore. They went to zero. They imploded. See the thread I linked which has a link to the WSJ that shows how the NAV calculation was done.
The ES spread strategy I have been trading made it through this extreme test. I did not exit any positions. As I write this I have made back 90% of what I lost yesterday.
I will be adding more cash excess because this was too close for comfort. I'm going from 4xIM to 5xIM. 80% cash instead of 75% cash.