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Kris Sidial‏ @Ksidiii 12 Feb 2021

Kris Sidial Retweeted I. Vodenitcharov CFA CMT

I’m waiting for someone to comment on this talking about a “gamma squeeze” without knowing what an authorized participant is https://twitter.com/iv_technicals/status/1360359579876528128 …

Kris Sidial added,

I. Vodenitcharov CFA CMT @iv_technicals

Going vertical pic.twitter.com/yvoV9vgnCn

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9 replies 3 retweets 73 likes

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Kris Sidial‏ @Ksidiii 12 Feb 2021

in case you don’t know, $UVXY is not driven on supply & demand, the price is derived off of VX futures

8 replies 5 retweets 80 likes

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macrocephalopod‏ @macrocephalopod 13 Feb 2021

Replying to @Ksidiii

Hey man, I’m afraid you’re wrong on this. When there is strong demand for UVXY shares they start to trade slightly above NAV. That incentives APs to buy VIX futures in the market and deliver them to the ETN sponsor in exchange for shares of UVXY which they can then

2 replies 0 retweets 11 likes

macrocephalopod‏ @macrocephalopod 13 Feb 2021

Replying to @macrocephalopod @Ksidiii

sell for a profit (at the higher-than-NAV price). The AP activity (buying VIX futs, selling UVXY) pushes up the prices of VIX futures and pushes down the price of UVXY but because UVXY started off at a premium, the net effect is that the prices of both VIX futures and

1 reply 0 retweets 4 likes

macrocephalopod‏ @macrocephalopod 13 Feb 2021

Replying to @macrocephalopod @Ksidiii

UVXY are higher than they were before the process started. Demand for ETN shares pushes up the price of the constituents in exactly the same way that demand for ETF shares pushes up the price of the constituents (or demand for stocks increases stock prices etc)

2 replies 0 retweets 4 likes

Mitchell Rosenthal‏ @M1tchRosenthal 13 Feb 2021

Replying to @macrocephalopod @Ksidiii

Mitchell Rosenthal Retweeted Zaphod

Very interesting, any opinion on this comment? Tho a bunch of bids to UVXY could change things, it may not be a very efficient way to do sohttps://twitter.com/MinvstrD/status/1360477273959333890?s=20 …

Mitchell Rosenthal added,

Zaphod @MinvstrD

Replying to @M1tchRosenthal @jam_croissant @StocksnScotch

It can (the wider complex "it") and has in the past, would have to check to see how big a position it is relative to last time it had reflexivity. Seems a dumb way to go about it as opposed to the source. They did it right last time. Attack a weak point leading to domino efdect

1 reply 0 retweets 0 likes

macrocephalopod‏ @macrocephalopod 13 Feb 2021

Replying to @M1tchRosenthal @Ksidiii

There are two things in play here — 1. demand for UVXY/VXX can push up prices for VIX futures 2. mechanical buying of VIX futures by UVXY, whenever they rise in price, to maintain its 1.5x leverage. So it is in theory possible to create a self-perpetuating momentum effect here...

1 reply 0 retweets 0 likes

macrocephalopod‏ @macrocephalopod 13 Feb 2021

Replying to @macrocephalopod @M1tchRosenthal @Ksidiii

especially if combined with additional leverage/gamma effect due to retail buying UVXY options rather than the underlying. In my opinion it would not be as dramatic as “volmageddon” which was caused by huge demand for XIV, the inverse VIX ETF (which somewhat ...

1 reply 0 retweets 0 likes

macrocephalopod‏ @macrocephalopod 13 Feb 2021

Replying to @macrocephalopod @M1tchRosenthal @Ksidiii

counterintuitively also needs to buy on price rises) because I don’t think the size of UVXY is as large as XIV was back in the day, and the UVXY does not create such a large mechanical buying effect as XIV did - but I could be wrong!

5:15 AM - 13 Feb 2021

1 reply 0 retweets 0 likes

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