Target: Volatility Index (VXX) trading @ $15.42
Commit Criteria: This is a new trade on VXX. We are doubling down on this big shift.
The market surged Friday on news of a eurozone deal and VXX dropped significantly. We still feel like VXX is not very unlikely to drop below 15, especially given the current chaotic market conditions. VXX implied volatility is overpriced relative to its forecast volatility of 15.87% over the trade period.We are looking for possible price movement but for it to stay above $14.66 until the exit of this trade. Note: we are breakeven or better as long as the VXX stays above $14.66. Tactic: Opening 50 VXX July 2012 bull put spreads (strikes 14/15) for a $0.44 credit. Tactical employment of bull put spread:
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