<p>I don’t think a lot of people realize that with the way the crisis is being handled in Europe, there is a potential for violent overthrowing of the governments etc. Ray Dalio expressed this view a few days ago.</p>
<p>it doesn’t look like this tvix correlates particularly well with the vix.</p>
<p>Post#3221, obviously not. :)</p>
<p>Tvix has to be adjusted every day to keep its relationship with the vix. It doesn’t look like the adjustments are working too well.</p>
<p>These products are awful. </p>
<p>Tigerdad, I am glad you had a good day. </p>
<p>If you are long the market and long products like tvix, you are partially hedged. Or, you would be if tvix was a better product. Echhhhh…</p>
<p>[VXX</a> Basic Chart | iPath S&P 500 VIX Short Term Fu Stock - Yahoo! Finance](<a href=“VXX Interactive Stock Chart | iPath Series B S&P 500 VIX Short-Term Futures ETN Stock - Yahoo Finance”>VXX Interactive Stock Chart | iPath Series B S&P 500 VIX Short-Term Futures ETN Stock - Yahoo Finance)</p>
<p>This is somewhat interesting and portends a dangerous future: [Catalonia</a> calls snap elections in independence drive from Madrid - Telegraph](<a href=“http://www.telegraph.co.uk/news/worldnews/europe/spain/9566649/Catalonia-calls-snap-elections-in-independence-drive-from-Madrid.html]Catalonia”>Catalonia calls snap elections in independence drive from Madrid)</p>
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<p>The beauty of democracies is that violence is avoided and voters just throw out the current set of bums and elect the new set of bums.</p>
<p>I am considering buying NSC. Coal will be weak for a long time but it is still cheaper to ship by rail for most large things.</p>
<p>Interesting link, doct.</p>
<p>I disagree with that statement. If the populace becomes sufficiently disenchanted with their choices, violent overthrows can occur. So far the US has avoided that but it doesn’t mean it can’t happen in the future.</p>
<p>As far as disagreeing with razorsharp’s statement, how about the Weimar Republic?</p>
<p>I agree with you doct.</p>
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<p>One example from a hundred years ago. There have been hundreds and hundreds of elections since then. Anything is possible but the violent overthrow of EU democracies won’t happen.</p>
<p>Greece and Spain are EU democracies. Greece can easily have a violent overthrow of the government including a military overthrow. Spain also has a possibility.</p>
<p>Thanks dstark.
I know tvix is an awful product (by now :)). I use it to hedge my long positions.</p>
<p>That’s good. At least you participated in the rally.</p>
<p>The problem with these vix products is each month has a different volatility. Oct volatility is higher than Sept was for example. So when you buy in late Aug and you think you are buying volatility at a good price because the vix is a low number, you might not be getting such a great price. The vix was a low number because Sept volatility was trading low. When Oct comes around the vix is adjusted upward to reflect the higher volatility, but you
don’t get that gain, because Oct volatilty was already trading higher.</p>
<p>These vix derivatives are trading off of the vix futures which trade on the CBOE.
If you open this link and look at the right of the page, you can see various vix future prices. The vix futures are higher the further out the futures contract.</p>
<p>Ok. I know this might be too much detail. If so, you can ignore the post. :)</p>
<p>dstark:</p>
<p>Given that the problems with vxx and its progeny are by this time well known to professionals in the investment field, what is the explanation for the huge volume? Who is buying these products? Can they be part of some complicated high frequency trading algorithm?</p>
<p>That was a very poor gdp number.</p>
<p>Years of zero percent interest rates and that is the best this country can do?</p>
<p>The durable goods number wasn’t good either.</p>
<p>And employment numbers were lowered.</p>
<p>And S&P futures are up…</p>
<p>Given that the problems associated with vxx and its progeny are well known to investment professionals, how does one explain the huge daily volume in vxx (and for that matter, the large volume in TVIX)? Who is buying these products? Could they be associated with some complex high frequency trading algoritm?</p>
<p>Definitely, hft is involved as are other investment professionals and firms. The public is involved too. </p>
<p>The public doesn’t understand the products. Some of the pros don’t either. :)</p>
<p>People are using these products to gamble, or to hedge their portfolios. There are correlations between market movement and the direction of the vxx.</p>
<p>I think that we would have had riots in the street without the low interest rates. We’re basically taking from savers and giving to the banks and other borrowers.</p>
<p>Market is up a little over Spain, China (I guess that they’re pumping), and unemployment numbers. Unemployment numbers were moderately better than expected. I don’t know if that really means anything. I posted on the retirement thread on the top 15 companies hiring in Massachusetts and they have almost 12,000 jobs. But the vast majority of those jobs are retail and probably seasonal.</p>
<p>There are companies and organizations there with a lot of professional jobs open but you’d better have the right set of skills to get considered for them. I just checked for openings for my company and I got over 21,000 hits returned - I imagine that most of these are jobs posted by companies looking for skills with our products.</p>
<p>So we have a bifurcated jobs market - tons of retail jobs and a lot, numerically, of high-wage, high-skill jobs that probably go wanting for lack of qualified candidates.</p>
<p>"People are using these products to gamble, or to hedge their portfolios. There are correlations between market movement and the direction of the vxx. "</p>
<p>Interesting - I’ve been talking to a coworker who’s very knowledgable on this stuff and he doesn’t completely understand it but he working to figure out how he can profit from the vxx, tvix and vix discrepancies.</p>
<p>Your co-worker and thousands of others are doing the same thing.</p>