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.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.