International Business Machines Corp (Ticker: IBM) did not light it up either.  Chipotle Mexican Grill (Ticker: CMG) managed a 3% rally but really nothing great.  If traders were looking for something great they did not get it right now from a couple of big names.

Yesterday in the Trading Desk I outlined a Proshares Ultra Short Term VIX futures ETF (Ticker: UVXY) and SPY pair.  Mark was able to launch his UVXY trade today as well and go full send.

The thing is both trades work on different time tables.

Understanding duration for a trade is important.

Taking money early is best

My UVXY/SPY trade was set up for a faster win.  My SPY puts in the trade expire next week and I might get a chance to close them today if the SPY selloff holds.

 UVXY May17 33 puts 2.24

1 SPY May03 495 puts  1.88 

I sold 2 of 3 UVXY puts for $2.60 today on the quick drop which put my cost of the 1 SPY put down to $1.18.  Taking profits on a short term trade is usually best since I don’t know when I might get those prices again.  I was looking for a short term drop in VIX and got it fast.

The UVXY trades have Jun time frames and depend more on the slower VIX future erosion than an overall drop in VIX.  A drop in VIX might get us to the finish line earlier.  

When trading VIX or VIX future products like UVXY, decay and shock are the two movers so just make sure you know which one is in play.

You can learn that in the Trading Desk where I am teaching our Vol MasterClass again.