Since VXX has yet to break decisively below the longstanding Hidden Pivot target at 26.32, I’ll suggest maintaining a token call position. The options are exorbitantly priced, trading with implied valuations more than two-and-a-half-times VXX’s actual volatility. For that reason, we’ll bid for just two of them now with money we can afford to lose painlessly. Bid 0.44 for two Feb2 30 calls, day order. Check for updates intraday, since I may update my guidance if the options appear to be just-out-of-reach. _______ UPDATE (Jan 22, 10:19 a.m. EST): VXX: Lower the bid for the VXX 2 Feb 30 calls to 0.36. _______ UPDATE (12:37 p.m.): The order has filled. Now kiss the $72 good-bye and be comforted by the fact that some poor sucker paid twice as much — today — for those same calls (and up to 1.37 just a few days ago). _______ UPDATE (Jan 24, 4:25 p.m.): The calls popped to 0.70 today. Since several subscribers reported taking at least a partial profit on the move, I will track a single remaining contract with a cost basis of 0.05. For future reference, please note that I always recommend cashing out of half of any option position when it has doubled in value. _______ UPDATE (Jan 28, 5:05 p.m.): VXX topped to-the-tick at a 28.31 target I posted in the chat room Thursday, completing a rally cycle begun two weeks ago. Buyers will need to get second wind this week to push our calls in-the-black, but profit-taking on half of the original position has reduced our exposure almost to zero.
