Jeff Bishop of TopStockPicks.com is buying UVXY (the ProShares Ultra VIX Short Term Futures ETF) because he sees volatility picking up over the rest of the year, and he is targeting a 10 percent upside on the trade over the next few weeks. “If you’re right, it’s a very high-return trade,” Bishop said. Bishop just started to trade UVXY, buying shares near the $13 level, and said he will look to buy more if it dips to the $12.50 level; he expects to sell in the mid-14 range. Bishop — who said he would be out of the trade if UVXY falls to the low $12 range — also owns $13 mid-December call options on UXVY.
  Bishop noted that the market is nearing historic, all-time lows in volatility, and that the underlying VIX (Chicago Board Options Exchange Market Volatility Index) has consistently held support at 9, roughly the level where it is at now, meaning the risk level on the trade is low, with the payoff likely to be a bounce that he expects may take a while but that could happen as quickly as the next few days; Keith Kern of RagingBull.com’s Lightning Alerts chat room noted earlier this week that the VIX has consistently bounced off of support and made for quick-trading profits this year, and that he expected to see a snap-back in volatility this week.

Read why Keith Kern of Lightning Alerts chat room expects the VIX to bounce this week

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Jeff Bishop is lead trader at TopStockPicks.com, running short-term trading strategies primarily using ETFs and stock options. At the time this conversation was taped on Nov. 28, he had purchased UVXY shares and also had mid-December options, and was planning to trade them as described in the interview. The Raging Bull podcast features experts from the site talking with Raging Bull editor Chuck Jaffe on his show, “Money Life with Chuck Jaffe.” You can learn more about Chuck’s daily hour of market and personal-finance chat at MoneyLifeShow.com; you can subscribe to the Raging Bull podcast via iTunes and other podcast providers.

Author: RagingBull

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