Trading Volatility: FREE eBook Shows How! // Strategies for trading UVXY TVIX VXX SVXY XIV

Trading Volatility: FREE eBook Shows How! // Strategies for trading UVXY TVIX VXX SVXY XIV


Trading Volatility: FREE eBook Shows How! // Strategies for trading UVXY TVIX VXX SVXY XIV // shorting short volatility trading strategies UVXY TVIX VXX strategy stocks selling system contango derivatives options futures index david moadel welcome to looking at the markets with
David Modell today’s special guest is Brennen Nick rum now Brennan is the
co-author of trading volatility using the 50 30 20 strategy there it is the
hard copy very good now this book is a comprehensive guide to trading
volatility exchange-traded products Brennan is offering believe it or not a
free PDF download of this book located at trading volatility dot info link is
in the description of this video and also a hard copy should be available on
Amazon soon so look for that so thank you very much Brennan for joining me
today on looking at the markets thanks for having me yeah I really appreciate
you doing this I think it’s fantastic that you’re offering this book or at
least the PDF copy for free that’s really fantastic so before we get into
the nuts and bolts of trading these products what prompted you to write this
book and why are you offering it for free that’s a really good question
ah so I’ve been on stock too it’s since 2015 and I’ve watched a lot of people
come and go from the long side of uvx why they come on they post a screenshot
holding 10,000 shares you vxy drops 10% and you never see them post again and
it’s such an easy mistake to make because when I started trading back in
2015 you know kind of embarrassed to say this but we had a market dip so I went
along T VIX and I told my friends I was shorting the market because I thought
that that’s how you shorted the market lets you go long G mix so as I as I’ve
treated as I’ve learned as I made mistakes as I’ve lost
one I’ve come to really love volatility and two I’ve realized people they don’t
need to make some of the same mistakes that so many other people make they
don’t need to go to that phase where they lose thousands of dollars and
they’re waking up every day with a headache and they’re like oh my gosh
like that’s my account value that’s down like a lot so we wanted to make this
book to basically just help people learn how people trade and to kind of put a
system in place so that people will trading volatility currently have sort
of a methodology to follow there’s a lot of different ways to trade it but I’ve
never really seen somebody put it in like a really solid strategy before and
I think it’s great what you’re doing and I I will be amazed if people don’t take
advantage of this why not again it’s a free download of the PDF and again the
book is the fifty thirty twenty strategy available at trading volatility dot info
there it is that is a cool looking hard copy ila and you can see that the chart
just going down down and down that’s what could happen if you try to go along
any of these VIX products so I don’t recommend doing that okay but if you’re
gonna short it or buy puts on it or put spreads or sell calls you have to do it
in the right way and you have a specific map so to speak on how to do this in
outline if you will a framework for example people might wonder what’s this
fifty thirty twenty strategy all about well I understand and you can probably
explain it a lot better than me you’re keeping fifty percent of your portfolio
value for this strategy in cash at all times
that’s the fifty and then there’s a thirty which represents thirty percent
of your portfolio and that is your swing trade your your short-term short to
medium-term trade part of the portfolio the swing trade and then the last twenty
percent is the what you might call the long-term
or core holdings now why did you choose that numbers and why why keep 50 percent
in cash at all times that is a really really good question so the short answer
for why to keep 50 percent of your portfolio in cash is because at any time
the market can do what it wants which means you know we could wake up tomorrow
and the market could be down 20% or something like that and volatility could
be through the roof and so keeping cash is essentially a hedge against the
inevitable huge big spike that could happen while trading these things and
then we’ve got the 30 percent that’s what I like to call the fun part of the
money because I love I trade every day I love trading scalping you know buying
the open summer clothes whatever it is you know that’s that’s the fun part of
your day to day trading money and what you want to use that 30 percent is to
basically you’re making money every day if you’re successful trading these
products so as you’re making money you’re putting more into the 50 percent
cash you’re putting you’re building that 30 percent and you’re building that 20
percent so it’s kind of have fun build up the account and then the 20 percent
core holding that is really the that’s what’s gonna get you the really big win
so you want to hold that thing for literally as long as you can for a few
reasons typically you know I’ve got the chart of
the you vxy right here on the cover you know it’s started way high and then it
pretty much is like skydiving it just knows that and it continues to
deteriorate deteriorate so the longer you can hold it the more of the
deterioration that you can capture and two if you hold over a year and then
potentially you know you don’t have to pay taxes until you do close it out and
anybody who’s ever tried to show you vxy dirty dicks knows that from time to time
getting shares are really hard to find so you keep those shares in your account
you just try to get as much you know once again decay as possible and you
hold it win the market you know correct so there’s a big fix big spike so we
recommend potentially turning that 30% swing trade into just cash because once
again people are asking what’s the hedge the hedge is going into cash and just
trying to let that big spike play itself out unless you know we’ve got into a
recession or something really drastic has changed most of the times big spots
and then it drops so giving up those shares means you don’t know when you’re
gonna get them back and you’re potentially paying taxes on a pretty
large amount so gotcha so you also recommend in the book something that
might seem unusual taking money out on a regular basis not just leaving it all in
there in fact you recommend taking one percent out per month now if what I want
to know is why would you do that the money in there but we you know you’re
making all this money we think you might as well take some out have fun with it
you know I got kids you know put it in in their accounts so you can save up for
college if you’ve got a significant other take your family out to dinner
we just think that you know you’re making this money enjoy it so pay
yourself a little bit sure might as well right I mean you’re not making money
just to have money it is meant to be spent at least some of it sure I totally
understand that now the VIX products and you actually
list you list the VIX products on your book cover we’re talking about the
popular ones that you might see talked about all the time on Twitter stock
twits and so on you vxy VXX t VIX now I’ve found through
my own recent experience that these are known as hard to borrow okay especially
the leveraged ones you vxy T VIX if you try to short them some people
actually have difficulty getting their broker to find or locate shares of UV x
YT VIX and even VXX too short because they’re hard to borrow do you have any
tips on trying to overcome that obstacle of the hard to borrow short positions I
have three tips for you so the first one is if you wake up early in the morning
give your broker a call and just flat out ask ache and I reserved X amount of
shares of UV x while your T Vicks for my account and potentially they’ll give you
a yes or no the second tip is to especially during pre market basically
enter in really high like limit orders so if you VX Y is trading at 20 bucks
put a limit order into short at 50 bucks which I know sounds absurd but for
whatever reason we’ve had block and you can just change the order and
potentially have those shares allocated to your account the third one which is
my personal favorite is to sell naked calls and have that call expire in the
money so that basically your account for every option you get short a hundred
shares and the reason that that one is my favorite
because by selling options you basically are collecting a premium so maybe you
sell the option for a hundred bucks so you can keep a hundred bucks and you can
use it for when you get assigned to shares and I don’t know about you but
you know you got from China struggling to climb chairs so now basically if you
if you sell the call correctly getting the shares and even having extra money
to shore with it and one of the fun things about the book
was was finding like an options broker that was dependable so we actually found
tastytrade and they’re really great for several reasons and I’m not you know I
don’t have any affiliation with them if you sign up great if not that’s okay too
but they charge one dollar per contract and then so exchange fees and there’s no
closing fee so typically you can do a round-trip and an option for less than a
dollar fifty and if you fund the account for two thousand dollars which is the
minimum for margin they let me as well as a couple other people I know some
they could cost which a lot of accounts out there require you to have six
figures in the account so yeah I recommend it that is pretty cool now I
actually have experienced this I recently called my broker and well
actually let me go back i shorted after there was a pop or a spike in the VIX i
shorted some call contracts on you vxy and because i I think that’s a way as
you mentioned to get into a possibly a short you vxy position you cannot do
this on TV TV IX by the way because it’s not optional
so and and then I thought to myself now wait a minute what will happen if you
vxy goes in the money and I’m assigned on these short or sold call options
okay you know will my broker then go out and locate those hard to borrow shares
of you vxy so I called up my broker and they said yeah no problem
okay we will find those shares all right so you know I was worried because I
thought oh are they just gonna liquidate my position are they just gonna close my
position but no so you have to have a good broker you have to communicate with
them and you have to know that if it comes down to it yes they will find
those shares too short it sounds like you know TD Ameritrade
might be a good one for that one I’ve been using Schwab lately and that’s the
one who I spoke to a lot of people like Scottrade that’s a popular one and I’ve
been you know I’ve spoken to some of the people who are the masters at these
strategies people like how a day trader people like Seth golden and you know
they’ve made quite a bit of money doing this what kinds of returns over time can
people expect from the strategies that you delineate in your book so you’re
like this you could easily see over a hundred percent of returns when we go
into you know a very marketer recession that’s where things get a lot trickier
and it’s hard to tell at that point so but you can easily double your money
after you spend a little bit of time familiarizing yourself and typically if
you’re new to this what I think a lot of will happen in new traders is there will
be some event you know maybe it has to do it
politics in North Korea or something there’s a pop in the VIX and they
potentially get scared and sell you know over time they’ll condition themselves
to really become a master at understanding what’s going on that’s
driving these events and seeing you know typically the VIX pops and it drops and
you know riding that out and finding how they want to swing trade and how they
want to you know go about their trading but I do believe you can get a hundred
percent returns that’s amazing and that’s why I’ve actually started
using these ideas these strategies myself so you know my return so far have
been pretty darn good so again I recommend people go to the website and
that is trading volatility info why not download your hard copy or you can wait
for the the paper copy on amazon.com look for that coming soon meanwhile I
just had a question about the core holdings which is your long-term you’re
you’re accumulating a short position in UV x YT VIX the X X whatever it is as
well as purchasing s B X Y and X and/or XIV yeah you can do that as well and I
know that you recommend doing all those things or at least some of them now the
thing about the core position the long-term position I got the impression
that you almost recommend just doing it just get started accumulating that short
position but there’s part of me that wants to sell high and buy low as
opposed to you know buy low and sell high there’s a part of me that wants to
shirk high you know in other words I want to wait until the VIX pops before I
start accumulating a long term position what do you think should people wait
until the VIX spike to begin their long term core holding or just get started
doing it what do you think and basically how much size you’re using
so if you can you know let’s say any day you know it’s a joke is a great day to
show you guys why it might pop and go against you but if you have the size to
just let it play out over time you’re gonna still come out on top so I think
it really comes down to your personality because both options are great
strategies in your case you found a way to you know reduce the risk if you can
get it on the top the trouble sometimes I’m going to try and nail spike is you
know you get in like right here bites you and if you’ve over sized you know
you potentially get yourself into some trouble whereas if you rang gonna be
short during the year you potentially might randomly get anyone and just write
it down write it down write it down so I think they’re both great yeah it’s kind
of like that debate of timing the market versus time in the market and it sounds
like you’re recommending just get some time in the market just get started even
if it’s just a small position and it’ll always be a small position because 50%
of your portfolio for this strategy is in cash at all times and I up to 80%
from what I understand because sometimes you’re going to liquidate that 30% of
the the swing trade position so you know you could you’ve got to have a lot of
cash and so for all the people out there on stock twits Twitter wherever you are
saying well one of these days you’re gonna regret using this strategy one of
these days it’s going to come back and bite you I think I know what your answer
is gonna be but let me let me hear it from you what is your response to those
two to the naysayers out there down with me I’d be happy yeah
because again you’re gonna have between 50 and 80 percent of your portfolio in
cash and so you’ll have some dry powder at that as they say ready for this to
happen and I think a lot maybe it’s just me but I think a lot of those people who
are the the more vocal naysayers I think some of them bought you vxy when it was
much higher or whatever it is and they might be a little bit frustrated and a
little bit angry and hoping just to get their money back and instead of learning
from the experience and just cutting their losses short and saying you know
what let me let me get on the smart side of this trade and and finally options
you know as far as buying options you know buying options can be a losing you
know because of time decay it could be a losing proposition and selling options
like selling a naked call that sounds a little scary even though I just did it
myself but I’m gonna pretend you know okay as a devil’s advocate you know
selling naked calls which you do actually have a section on in your book
sounds like a scary proposition what do you see what would you say to people who
are afraid to do something like that because your friend down the street told
you it’s dangerous what are you afraid of and then try to tackle that beer
worst case scenario you know you can I which is short you
know just with the shares you don’t have to do options but I think that the
beauty of of options is that you can control a hundred shares for such less
amount of money than you would if you took the that the shares out right so do
do what works for your psychology but I always try to improve your psychology I
agree it this is such a mental game trading and investing and also just for
shorting yeah because shorting anything involves potentially potentially
unlimited losses or undefined losses there so people who are afraid to do
that I mean have you have you experienced a situation where you had to
ride out a potentially scary situation but you came out okay on the other side
I’m guessing that must happen at least once to you really well because if you
are sighs you can get yourself into trouble you know you can wake up and
there’s a Black Swan that nobody accounted for and you potentially are
position where you get an emergent call or you have to take a loss but if you
give yourself question you can survive and you can thrive and
you know continue to just ride the downward trend and that’s exactly what
you’ve been doing just like the cover of that book what better cover could there
be the downward trend okay yeah don’t let that happen to you take
the smart side of this trade I’m telling you people okay I think it’s fantastic I
think you’re such a nice guy to give out this book for free the PDF version I
mean some people I’ve interviewed you know they have something to sell and and
that’s fine yeah there’s nothing wrong with that but you’re just doing this
just because you want to do it which i think is amazing i I hope people you
know I’m going to promote the heck out of
us on Twitter or stock twits wherever I can because I think this is a worthy
cause I’m not afraid of this being an overcrowded trade because there will
always be people and institutions buying plenty plenty of you vxy t v– IX b XX
so on and so forth I’m not concerned about that I’m not trying to keep this a
big secret I’m ready to spread the knowledge so Brendan thank you so much
for doing this and for coming on today I’d be glad to
have you back any time just to get an update on the book and on your progress
with this with this strategy so Brandon Ekrem once again the book is
using the fifty thirty twenty strategy available at trading volatility infocom
hard cut hard copy coming to amazon soon brand thank you so much for joining me
on looking at the markets you’re welcome back anytime sir thank you for watching
please like comment and subscribe and i’ll see you next time

6 thoughts on “Trading Volatility: FREE eBook Shows How! // Strategies for trading UVXY TVIX VXX SVXY XIV

  1. Thank you David! You are the man! Teach other people how to win trade gasoline products. I am waiting for vix spike coming up. Great ready for actions 🙂

  2. Hi thank you so much for your videos i really love them and has helped me so much!! I have a question and also would like your opinion. What indicators do u think is best to use for day trading.
    Whats your opinion on program trading 212?

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