Break In - VXX trade

After a run up - for example
on 2/25 VXX moved from 21 to 25
on 2/26 openup and closed down high of 26.89 closed around 24.50.  So we are in contango have leverage vxx put spread. In a slight chance that it might shoot again we do a ratio spread.

so march  option  on feb 26th
Put spread - March 22 - Mar 20(.VXX130316P22-.VXX130316P20) for 30 cents
This can be profitable in next 3 days it would give 60 cents.

In case the vxx again rises the other side would be -.VXX130316C27+2*.VXX130316C29
for 15 cents. It could be sold in next 3 days for 10 to 15 cents.


DANGERS  - this trades need to be move immideately or else it can be painful to come out of the spread specialy the one with ratio spread.

Same could be done on 2/22

for - -.VXX130316C26+2*.VXX130316C28
and   .VXX130316P20-.VXX130316P18

Lesson 1 - come out quick if there is good profit.


There was a simillar opp on 12/24 Vxx truned down from a good runup 28 to 33. On 24th red.
 its was closing  red at 32.

So trade would be jan put spreads - 29/27 for 40 cents
and -1*34 and 2*37 ratio spread for around 30 cents.