With the “Trump Rally” continuing to hold its gains a lot of investors who went short the rally are staring at some pretty big losses.
An investor recently posted his dilemma with a VXX trade where he is holding 3600 shares at an average price of $33 and the VXX is presently (Mar 8 2017) trading for $17.00.
Original Capital invested is $118,800.00 and the trade is down 50%.
So should the investor take losses, get out and try to recover $57,600 in losses or is there something that can be done to try to repair the trade.
The VXX is an ETN from iPath® which is based on the S&P 500 VIX Short-Term Futures. The VXX is designed to provide access to equity market volatility through CBOE Volatility Index futures. The index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects the implied volatility of the S&P 500 at various points along the volatility forward curve. I do not trade the VXX. I trade the VIX Index options and only in small quantities.
This repair strategy article is 3700 words in length and requires 10 pages if printed. It is for FullyInformed Members.
Repairing 50% Loss In VXX Trade