We’ll continue to shadow VXX, waiting for the perfect opportunity, since there’s a juicy payoff in this vehicle if you get the timing right. We did that the last time out, buying call options pennies from their low before they doubled later that day, then quadrupled a few days later. The trick is to line up a lowball bid in options that coincides with a targeted top or bottom in VXX. The options themselves are targetable, and the fact that they rarely overshoot a target by much makes the bet a relatively low-risk one. The more difficult trick is making a timely exit, since price spikes are fleeting, often narrowing the profit-taking window to minutes or less. This was the case when we cashed out the calls mentioned above. Fortunately, we were able to offer them ahead of the move by using a rally target for VXX that nailed the intraday high. Looking just ahead, we’ll let VXX cool off a little more before we look for an entry spot. If you’re keen on participating, stay tuned to the chat room — and be sure to check ‘Email Notifications’ on your account page to receive timely alerts. ______ UPDATE (Apr 25, 12:19 a.m. ET): Patience may pay off yet again, but it has already prevented us from chasing one of VXX’s notorious fake-out rallies. We buy only on weakness, and it looks like our next opportunity could be near. Specifically, I’ll recommend bidding 0.20 for eight May 5th 15 calls, day order. Take 0.05 discretion, meaning you can pay up to 0.25 for them if they look absolutely un-buyable for .020 with VXX trading within a few ticks of our 14.67 target (click here for chart). This is a jackpot bet of sorts, with a bid a couple of pennies above ‘fair value’ if VXX should fall to a promising target at 14.64 (daily chart, A= 19.06 on 2/24; B=15.30 on 3/29). _______ UPDATE (Apr 25, 11:47 p.m.): Leave the call bid in for another day. _______ UPDATE (Apr 26, 8:22 p.m.): I’m still keen on buying calls if VXX falls to the target, but we’ll need to move further out on the expiration because VXX is taking its sweet old time getting there. Accordingly, I’ll now recommend bidding 0.30 for eight May 12th 15 calls, good through Friday. They closed on Wednesday at 0.67, down from 2.73 just a week ago.
