Archive Category: 10x Profits Archives

I don’t have a full issue for you today because my team and I are meeting to discuss several topics — one of which is our plan for our risk-on position in light of the situation with the iPath Series B S&P 500 VIX Short-Term Futures ETN (NYSE: VXX).

What is it about March, man?! I remember March 2020 like it was yesterday. We were in the throes of the “coronacrash.” I passed on showers, food and sleep as I worked to figure out what the accelerating global pandemic was doing to the stock market and volatility. We netted a 21.6% return that month, thanks in part to my discretionary decision to take profits on a portion of our long-VXX trade, which went vertical just as my analysis suggested “the bottom” of the sell-off was in.

Well, we finally know what happened at Barclays… I’ll explain the whole saga shortly. But first, I recommend closing your position in VXX as soon as you can. We typically issue trade alerts between 8 a.m. and 9 a.m. Eastern time, to execute at the 9:30 a.m. open. If, for some reason, you don’t see this alert until tomorrow morning … or if you can’t act on it until then … I don’t expect it will make a drastic difference versus exiting your position this afternoon. I just thought you’d want to know the latest update on Barclays … and know that it has prompted me to recommend we stop owning or trading VXX until further notice.

Last week, I explained Barclays’ decision to suspend the creation of new shares of the iPath Series B S&P 500 VIX Short-Term ETN (NYSE: VXX) until further notice. It’s typical for the price of an exchange-traded fund (ETF) or exchange-traded note (ETN) that trades freely on the open market to closely match the price of the (non-tradable) index that the ETF or ETN promises to track. Sometimes the ETF/ETN will trade at a slight “premium” — the open market price is, say, 0.1% higher than the index value. Other times it will trade at a slight “discount” — say, 0.1% lower than the index. That happens because of what’s called the “creation/redemption” function of ETFs.

I have important news to share with you related to our primary risk-off vehicle, the iPath Series B S&P 500 VIX Short-Term ETN (NYSE: VXX). Barclays, the issuer of this exchange-traded note, announced yesterday that it had suspended the creation of new shares until further notice. This means: If you already own shares of VXX, you are still allowed to sell them. If you want to buy shares of VXX, you still can … in the secondary market. However, the number of VXX shares outstanding will not increase, until further notice, by the typical ETF “creation/redemption” process.