YunRueiTsai @YunRueiTsai: "Shorting VXX (iPath S&P 500..."

Taiwan

Shorting VXX (iPath S&P 500 VIX Short-Term Futures ETN) is an attractive yet risky trading strategy. VXX is based on volatility futures, which typically lose value over time due to "roll yield loss." This gives shorting VXX the appearance of a "high-probability" strategy, but it carries significant hidden risks. 📉⚠️ Why Shorting VXX Seems High-Probability 🤔 Volatility Futures Structure VXX's value is tied to VIX short-term futures, which tend to decline over time. When market volatility is low, VIX futures are often in "contango" (longer-term contracts are more expensive than near-term ones), leading to "roll yield loss" and a gradual decline in VXX. This makes shorting VXX appear profitable. 📊 Negative Expected Returns Due to contango, VXX's underlying VIX futures often have negative long-term returns. This natural downward bias makes shorting it seem like a steady strategy. 📉 Risks: Market Panic and Black Swan Events ⚠️🦢 However, shorting VXX has huge risks, especially during market panic or "black swan events." 🌪️ When crises occur (e.g., financial crises, geopolitical conflicts), VIX can surge sharply, causing VXX to spike. Investors shorting VXX could face severe losses, even wiping out their accounts. 🚨 Risk Management Tips 🛡️ Set Stop-Losses: Strict stop-loss points help minimize losses if VXX rises suddenly. ⛔️ Control Position Size: Avoid over-concentration to reduce potential losses. 📊 Diversify Strategies: Combine shorting VXX with other strategies to lower risk. 🛡️📈 Conclusion: Shorting VXX can be profitable but requires caution, risk management, and diversification. Do you agree with this approach? What are your thoughts? 🤔 $VXX $NVDA (NVIDIA Corporation) $UVXY $SPX500 $QQQ $SQQQ $TQQQ $SOXL $TSLA (Tesla Motors, Inc.) $BTC $BNB $ETH

Agree

100.00%

Bullshit

100.00%

I like VXX

100.00%

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