Novice Trade: UVXY

Over the last two days the Nikkei has gotten completely smoked. I mean last night there were no bids to be found in Japan, yet here we are down a whopping 2% in two days. While it's easy to fall into the "we are heading right back to February lows" talk, this really feels like a one-off event (two off in this case).

I would be looking to fade volatility here and do so by buying puts in iPath S&P 500 VIX ST Futures ETN (VXX) or ProShares Ultra VIX Short-Term Futures (UVXY) (like last week). These little pops can be great chances to take advantage of VIX getting back into the 16s. I would be a buyer of the UVXY May 6 weekly puts, which expire after the non-farm payrolls report, as I think we will get a relief rally by Tuesday morning, unless something completely crazy happens in Japan....28 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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