Thursday, August 25, 2016

VXX Purchase Weekly Update

Sorry for the long absence. I lost some money in August, 2015, because of lack of experience.  Now I decided to come back to this blog with more diversified investment strategies, although my ultimate goal is still to accumulate funds for dividend investment.  I'll use this blog as my investment journal while I am experimentally playing with several strategies.

Market has been toppy for quite some time.  VIX stays in its lower range.  I regard this as an opportunity to accumulate VXX shares.  Actually I have been slowly buying VXX since mid of July, with tiny shares each time.  Up to date, I have 106 shares on hand, with the average cost at $39, and paper loss at around $232.  I'll continue to purchase more shares with the purpose to average down the cost.

According to my back test (limited data only due to short history of VXX), as long as I have enough patience and enough appetite to endure a large amount of paper loss, the ultimate result should be positive.

Of course, I realize that this trading is kind of against market with the assumption that market should pull back a little from its high and VIX should have spikes now and then even in an overall bull market.  At the same time, even though the ultimate result might turn out acceptable, the process is usually prolonged and stressful due to large amount of paper loss one has to face and endure everyday.  So it is risky and not recommended for everyone. 

Anyway, let's see how it turns out.