UVXY shares are now +30% since the April 12th Buy Signal. The recommended option, May 20th $15C has just about doubled, up 90% as of mid-day today. Since UVXY is itself a highly leveraged instrument, holding the shares in lieu of options provides an opportunity for outstanding option-like returns without the speculative risk. During the Covid Crash of March 2020, UVXY traded from around $100 (split adjusted) on February 9, 2020 to as high as $1,350 on March 18, 2020, a gain of about 1250%. That was a rare 12X win and the reason it is the subject of this update is that if the market is in fact in a Wave 3 of 3 down as our weekend charts suggest, similar UVXY returns may be imminent. Buying and holding UVXY with a 50% stop is a directional bet on a sudden and sharp increase in volatility, i.e., on the market going down fast, as opposed to going down slow or not at all. The one big advantage owning just the shares, not the options, is that there is no expiration on the bet, making timing much less of an issue. Worst case, the built-in attrition of the instrument will eventually trigger the 50% stop. Risk = 50%; Reward = Multi-fold. UVXY Covid Crash - March 2020 The chart below is of UVXY on a log scale and it looks about time for a spike higher. The market action Monday and Tuesday coupled with our weekend charts make the case for another multi-fold increase in UVXY in the weeks ahead. Holding shares instead of options makes exact timing less important, although it does lessen the potential for obscene profits, if you are into that sort of thing,
