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Strategies & Market Trends : Effective Collaboration - Team Research for Better Returns:

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To: Robert O who wrote (2001)5/17/2013 1:14:02 PM
From: The Ox  Read Replies (2) of 8239
 
I've been doing more watching of the XIV-VXX in relation to SPY. I'm convinced it's main usage should be for insurance or a hedge.

Most traders will be much better served to play the SPY long or short, and leaving the XIV/VXX more or less alone. Options volatility appears to be "gamed" more often than not. Way too many situations where the movement in the volatility indexes plays are stifled or show a fraction of the move one might expect.

They have their place and they are very liquid, so they allow for quick and easy trading if you want to go that route. Flipping out of XIV and into VXX (or vice versa) is a very convenient way to play the market's swings but the fact that they easily disconnect from the market's actual movement makes them appear somewhat suspect.
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