How long to hold vxx

Reply Replies 3. Reply Replies 5. Any comments on the markets year end close? Some years it seems the markets rise at the end of the year so the money managers look good then other years the market will drop at the end of the year so the money manager will look good next year. I find it comical that people will buy and hold the VXX because it drops to a lower price.

Considering there is no advantage to this since it is designed to deteriorate in value to begin with and will go up only on volatility. Anyone agree? I'm in today for the Powell Party! Reply Replies 1. Great to offset the around the corner correction.

The long term expected value of your ETNs is zero. If you hold your ETNs as a long term investment, it is likely that you will lose all or a substantial portion of your investment.

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All rights reserved. All other trademarks, servicemarks or registered trademarks are the property, and used with the permission, of their respective owners. Products Products. Product Suites. About iPath ETNs. Under normal conditions, first-month VIX futures are priced lower than second-month contracts as uncertainty about how stocks will fare leads traders to boost the volatility embedded in further-out expirations.

That is a problem for VXX, which essentially is constantly selling the relatively cheaper first-month contract and buying the more expensive second-month contract.

This constant erosion in value has caused VXX to hemorrhage money like few other products. But during times of market stress, such as now, first-month contracts become even more pricy than contracts with expirations further out. That gives VXX a fillip. It's fine to play in the very short term. But if you do that, the numbers suggest you are better off anticipating a VIX pop than trying to ride one in progress.

Unfortunately, that's almost by definition a crapshoot. So, just stick with good old-fashioned index puts! Disclaimer: Mr. Warner's opinions expressed above do not necessarily represent the views of Schaeffer's Investment Research. Toggle navigation. Schaeffer's Volatility Scorecard. Featured Publication. Trading Analysis. Stock Options. Trading Education. Market News.