XXV Finale

• Posted by Adam Warner
• on July 22nd, 2010

If my analysis of XXV is correct, it’s going to have some odd quirks.

When it’s over $20, it will “under” rally relative to further dips in VXX. At least on a day over day basis. Conversely it will “over” decline on VXX lifts from here.

If XXV is under $20? Scratch the above and reverse it.

Over time though, if VXX gradually drifts, as we expect it too, XXV should appreciate. You’re going to clearly get some painful bumps along the way as VXX will have blip-up days. But if it fits you ever to go short volatility, this feels like a decent vehicle to do it with.

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