MDM - TVIX issue

Published : December 22 2011 at 10:08 ET

We have removed the TVIX table from the results page. Showing TVIX invites speculation in this highly volatile instrument and numerous questions as to how one might trade it.

TVIX should only be traded by those who have studied it rigorously, due to it being the most volatile of ETFs and often having a non-correlative manner with the actual VIX. I am currently undergoing my own studies of this instrument to see if there is a favorable risk/reward trading edge.

The potential in TVIX has shown itself to be enormous with a 540% return over 5 true signals in row from August 2 to October 5, but drawdowns must also be maintained at reasonable levels. Asymmetric trading focuses on boosting reward while minimizing risk. At present, both reward and risk in TVIX are at maximum levels, so in the weeks ahead, I will look into how to moderate risk in TVIX to see if there is a viable trading strategy.

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