To receive further updates on this iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX) trade, .
I always like to write puts when the iPath S&P 500 VIX Short Term Futures TM ETN (NYSEARCA:VXX) gets really low, because it’s not going to go much lower. And that is what I’m also recommending to you today:
Sell to open the VXX May 26th $14 put at about $0.28.
VXX shares are currently at about $14.50. If you do not want to be “put” the shares, watch for a drop below $13.50 prior to expiration on May 26. If you are holding the option at expiration and the stock is trading below the $14 strike price, you will be put the shares. If you do not want to take possession of shares, exit the trade if VXX shares drop below $13.50.
A naked put write is a bullish position in which you expect the price of the underlying stock to increase. So, with this trade I’m betting that VXX shares won’t get down to our $14 strike.
We have most of May for our bullish VXX trade — and I think there’s more volatility in this market than they’re saying at this point. I expect the CBOE Volatility Index
(INDEXCBOE:VIX) to rise again, which would be advantageous to this position.
Ken Trester is editor of the popular program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.
