VXX Reverse Split - Does it affect Options?

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Brent Osachoff, volatility trading strategies, VTS, vts options, volatility trading, Volatility ETPs, options trading, investing, stock market, VIX, VXX, UVXY, VIX trading, vix strategy, vix options, vxx options, risk management, tactical investing, stock market

[VolatilityTradingStrategies]

I respond to comments so feel free to ask questions!

[duanebotha]

Thanks for the video! I wish I saw it earlier - I woke up to an email from Robinhood this morning saying there has been a corporate action on VXX - no warning before it happened and not even details about the fact that it is a 1 to 4 reverse stock split. All my ("new") VXX options didn't show up on my portfolio till about 10:30 AM ET. I now find myself in a position where the bid-offer spread on the options are about 25%. Any recommendation as to what to do to get rid of these without accepting a big loss? Oh and Robinhood is only allowing me to close my position, i.e. sell my call options (no buying of more of the same options or even buying any new VXX options). I will definitely be switching to another broker, once all my Robinhood options are closed.

[singa]

Great information, I think when reverse split happens, ETFs are given more money to buy, increasing the leverge 4 times, and asking market to use it going up. But as you may know, Leverage is senstive to interest rate, to counter the effect need to buy bonds at lease 10year, as 11 year cycle of recetion and now inflation, will create a herri-cane (hurry - means speed, cane - means sugar, means energy), laud thinking, that's why SEC whated to introduce segmented volitility trading instuments, because of Leveraging, all countries are at risk, as banks are also using credit swaps in dollars, insane.

[Maitreya]

Why isnt option available after the reverse split on Apr 23, 2021?

[eaglefanaustin]

Anyone having problems with options today. My account is showing vxx1 and has no market for these options. Only allows me to sell at .01 today

[nickbowieULL]

Does August or September calls sound good to get next month

[cookierepairprojects]

Ok so it happened today, all my options are worthless, are we just waiting until new contracts get written?

[JamesJosephFinn]

Great training. I have VXX 6/18 $18 calls, that have turned into VXX1 calls. So, a liquidity problem means I may have trouble selling them in a timely manner the longer I hold?

[sedul]

What are your thoughts on holding Put options past the date and just use limit sell to sell the option - really to save the transactional cost despite the liquidity issues

[SolidBased]

Definitely don’t go long on the VXX lol that’s a weekly if not daily!!!

[liaoweien]

i feel like you will “lose money” for the reverse split due to the low liquidity (much higher bid ask spread) since everyone is trying to sell at that point. is that correct? Thanks

[evandeer]

So I want able to find info on what the vxx looks like after a stock split but if it looks anything like the UVXY after then the vxx will continue to fall.

[sedul]

Oof, what happened to the VXX Option Chain. It is monthly only now? I believe I read this has happened in the past reverse splits.

[billywkham]

I heard UVXY is RSing tomorrow? I have 140 put contracts for next week thinking I’ll close tomorrow abs re open Monday?

[lettalkaboutfinance]

Assuming reverse split occurs indefinitely, what happens when the outstanding amount of shares are small? Not enough to do a reverse split? Is this why we have a shelf life on VXX?

[kevins]

in general, isnt it better to trade VIXY over VXX since VXX is an ETN and VIXY an ETF

[frankzhandamo]

Hi, today is their ex-dividend day and my vxx options became vxx1 options. Although I was able to unload them, I was NOT able to find options to trade(re-establish) my positions on the now new VXX. Any insight to why this happening? Does it have anything to do with reverse split process? When do options start trading on the newly reverse split VXX?

[RussellD]

my understanding that options will stay the same, and still be X100 and keep the same strikes... they will be cheaper then then the new ones, so in my opinion, they will be very liquid as they are the cheaper way to bet.. But "IF" they were exercised, then they would be X25 and not 100... but to buy and sell post split, they will stay X100 as usual. al will stay the same, but your $12 call will have a much lower premium compared to the $48 calls will be... but the $12 call will still buy and sell at X100 NOT X25 as you stated.

[RussellD]

Come on man, Its NOT an ETF, and It hasn't had 6 rev splits!!! This one has had NONE... This is VXXB... come on your smarter then that bro! This ETN is only a coupe years old... VXX(a) expired in 2019 which is what your charts show, your showing another ETN, NOT THIS No hate, but its a Debt NOTE, and BOND if you will... Its NOT an ETF, and its not the VXX that started in 2009!