Novice Trade: UVXY

I think this little vol blip is a blessing from the market. While we might see another day of this mess, like most recent vol events, without a real catalyst, the market is going to take this pop and short it.

One unique thing about the last couple of days is that we may actually know where the vol came from. While it is related to Amazon (AMZN) and the NDX 100, we also learned that Double Line recently bought a ton of S&P 500 (^GSPC) puts with a duration of five months. That is enough to push the Volatility Index around a touch over the last couple of days especially with VIX in the 9s. I would take this chance to fade the move by buying the ProShares Ultra VIX Short-Term Futures (UVXY) Aug 3 puts for around $3.00 -- a good price for something I will sell at $4.50 next week....10 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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