XIV Crashes of 10% or more Rankings – We’ve avoided 31 of 36 now

by | Sep 10, 2016

 

I’ve stressed repeatedly over the years  (perhaps at times sounding like a broken record)  that our VTS Tactical Volatility Strategy focuses on safety and risk management above all else.  There’s no better way to prove that than tracking it’s performance during those times when you’d definitely want an increased focus on preservation of capital.

The VIX Index can and does spike up violently from time to time  (click here to see the top 25 VIX Spikes in History)  which in turn causes the XIV ETN to crash.  It’s at these times that our conservative trading strategy really pays off.

 

As you can see in the chart, only 5 times in a total of 36 XIV crashes over 10% since inception was our strategy actually in a trade that lost money.  6 times the strategy was in the VXX which profits from the decline.  In total the strategy was actually very profitable during the 36 worst days for the XIV because we were mostly either in cash or in VXX making money off it.

31 out of 36 times we were either safely in cash, or actually profiting from the decline by being in the inverse ETF VXX.  That’s what we mean when we talk about risk management.  Over 85% success rate at avoiding the worst days. 

 

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