It is a year after you posted this video. First, thank you for your balanced analysis. Too many channels tout SVOL as great. They don't mention the risks involved. I have a little less than 1.5% of my portfolio in SVOL. Price appreciation has been OKAY. The dividend has been great. The risks can't be ignored, so I'm holding at
I've traded the Vol products since inception, and I like this fund. Since inception in May 2021: If you reinvested dividends: SVOL is up 15.07% SPY is up 2.6% JEPI is 10.37% So yes, I believe a portion of your investments should be in SVOL.
So a portion of your portfolio should be in an investment that can pretty easily go to zero? No thanks. No reason to yield chase. The fund managers even tell you about the risk of losing your money @8:00
@mjs28s Probability of "...easily go to zero..." exist only theoretically, in reality you are gonna need another 'virus' or GFC 2.0 to be in trouble with this. You don't understand how vix futures work, 84% of the time SVOL is gonna make money.
I own JEPI and its 10+% yield is widely touted, but when I multiply the monthly dividend by 12 and divide by the current price the yield is 6.5%. What am I missing?
So far so good with the fund. But the risks you outlined makes you think. A possible stop loss could mitigate some of this risk. The income characteristic is compelling. Once again a small position can generate enough income with minor fear of loss
@@nicklaforge You don't quite understand how vix futures work. SVOL is short some of those futures, it's 'poised' to be a money-making machine because they 'decay' (lose value and behave like out of money options that expire worthless). Risk of going to zero is close to zero (existing only theoretically).
here is the comparison of SVOL VS SPY. Svol has beaten SPY by wide margin. these numbers are based on dividend re invested SVOL SPY Start date: 05/13/2021 05/13/2021 End date: 05/24/2023 05/24/2023 Start price/share: $25.15 $410.28 End price/share: $22.02 $411.09 Starting shares: 397.63 24.37 Ending shares: 518.28 25.12 Dividends reinvested/share: $6.23 $12.26 Total return: 14.12% 3.26% Average Annual Total Return: 6.72% 1.59% Starting investment: $10,000.00 $10,000.00 Ending investment: $11,411.50 $10,325.44 Years: 2.03 2.03
..the longer you hold the fund the greater the potential for loss...? Can't that be said for everything you own? Started buying it when it was at $27. Cost basis is now less than $22 thanks to drip. Curious as to how much of the boiler plate stuff is required by lawyers. Since I invested in this as an alternative to cash I have received in excess of 1% per month. I also love trading options and really like buy write strategies.
Thanks Nick, I’ve been considering this fund for some time but haven’t gotten into the nitty gritty of what is really going on under the hood of this thing. Your review was much needed and appreciated.
This fund is similar to XIV, which exploded in Feb 2019 due to a spike in the VIX. The difference w/SVOL is they have a waay out of the money call option on the VIX at 60, designed to protect the fund if the VIX would spike.
There is a very new fund, OARK that writes OTM CC on Cathie Wood's Ark fund...it seems to have insane yields. I wonder what your preliminary thoughts might be there. They also have one with Tesla stock and plan on launching more similar funds. I am seriously considering putting some amount of money there. Kudos, thanks for explaining SVOL, I was considering it, but I only want maintenance free, moderate risk passive income.
Thanks for your video, great job by actually reading through the SVOL's prospectus important details. I had invested in this fund for the last 3 months. The hi yield is excellent. However, the fund tells you it's for short term investments. More troubling though is tells you at least twice you " could potentially lose the full principal of his or her investment within a single day". That's too much risk for me, I'm getting out of this.
Selling volatility has been a secret strategy of some major players for many many years. This fund is just copying the strategy that made investment bankers a LOT of money! They also say selling naked puts is super risky but tell that to Goldman Sachs! I am holding long term so check in with me 10 years from now, hehe
I'm not sure I'm calculating this correctly - but - if only 25% of AUM is in short VIX futures, the long calls are at VIX = 50 and VIX currently trading at 17.5, then how much is lost of VIX jumps from 17.5 to 50? It seems like the entire portfolio would be down 50% prior to the long calls kicking in
If anybody is still looking at this, why can't you figure out the Delta and sell some mini or micro /VX futures to hedge SVOL, since it pretty much follows the the S&P around like a puppy, and collect the big dividend?
while hear on you on risk they are effectively hedging and delivering dividends consistently ? why ? he spike in Vox is their downside they dont make themselves as an end all but they keep delivering income at .32 per month while NAV has not free fallen has it ? Complex yes but do they perform ? Are there eating their own cooking ? it seems they are .. are losses recoverable?
I have one issue with your report. I didn't see the scenario in which SVOL would lose it's value. I've seen where it has what can only be described as a built in stop loss in our the money calls and puts to prevent this catastrophe outcome. Please educate me if I am wrong. Sincerely trying to learn Incase I missed something when I did my analysis only two months ago.
that’s a dangerous mindset to have, of course Svol can easily lose value, it is down over 15% since inception date. At its core Svol can tank during unexpected large spikes in volatility due to numerous factors. It can also lose value anytime volatility isn’t falling. The option overlay seems to help, but things tend to work until they don’t, look at nusi as the poster child of this. As the documents say, this is not meant to be held long term, it is intended to short volatility. If the market is indeed back to a bull run, Svol’s specific strategy will not work in that market.
Could you do a review on another ETF that simplify just put out called HIGH it invest in treasuries with a covered call overlay it seems like an interesting one alternative I’d like to know your opinion on it. Thank you.
You could use it to short the VIX while getting a premium potentially but there is a better way to do that through SVIX the -1x VIX futures ETF. Why get only -0.2-0.3 with a lot more risk when you can swing SVIX for a higher return on crashes in volatility
I’ve only owned for 3 months (103 shares). Been making good dividend but! This mth the principal went down almost what the dividend payment was. Qrmi went even lower then the dividend payment 🤷🏼♂️ holding for now
Great video!! Thanks for breaking it down !!! These past few days watching my crypto portfolio decline is very disheartening. Holding doesn't really profit much,. Any ideas on how to earn better on the short run?
Son bought Crypto and he lost out on some of his investment. I told him not to invest in Crypto. I just bought shares of TSLY, it sells cover call on Tesla and pays a 61 percent dividend.
I would love to hear your breakdown on the 2 new monthly income ETFs... YieldMax Option Income ETF OARK with a Current Yield of 55.70% As of 03/21/2023 & YieldMax Option Income ETF TSLY with a Current Yield of 67.30% As of 03/21/2023
I start buying when VIX hits 30 and accumulate until it reaches 40, then wait until it drops to 20 and I get out. Monthly dividend is what make me NOT to panic.
1. When VIX goes to 30 you aren't buying SVOL, you gonna be shitting your pants and expect it to go to 40. 2. VIX can stay low for LONG periods of time (it's long term average is 14), and while you're waiting for vix spikes to enter SVOL is gonna make money for others: Time IN the trade is more profitable than trying Timing it.
@@ivantsanov3650 Thanks but 1.historically VIX didn't stay long for 40, odds are it will go back to below 30 level relatively sooner, so I would gladly buy(accumulate) at 30+ 2. VIX can stay low for long, yes, that's why I don't own SVOL. Simple.
The probability of SVOL to go to zero is near zero, theoretically it's there (but reality is different) Theoretically any stock on the market can go to zero.
It is a year after you posted this video.
First, thank you for your balanced analysis. Too many channels tout SVOL as great. They don't mention the risks involved. I have a little less than 1.5% of my portfolio in SVOL. Price appreciation has been OKAY. The dividend has been great. The risks can't be ignored, so I'm holding at
I've traded the Vol products since inception, and I like this fund.
Since inception in May 2021: If you reinvested dividends:
SVOL is up 15.07%
SPY is up 2.6%
JEPI is 10.37%
So yes, I believe a portion of your investments should be in SVOL.
So a portion of your portfolio should be in an investment that can pretty easily go to zero?
No thanks.
No reason to yield chase.
The fund managers even tell you about the risk of losing your money @8:00
@mjs28s Probability of "...easily go to zero..." exist only theoretically, in reality you are gonna need another 'virus' or GFC 2.0 to be in trouble with this.
You don't understand how vix futures work, 84% of the time SVOL is gonna make money.
@@mjs28sthat’s boilerplate language that you’d find on many prospectus
@@mjs28s And you can't profit off it going to zero? Do you just not have insurance in case your house burns down *facepalm*
I have both and so far svol has out performed jepi. Let's hope it stays that way.
Thanks for the warning. I will revisit on a prolonged spike in volatility.
I own JEPI and its 10+% yield is widely touted, but when I multiply the monthly dividend by 12 and divide by the current price the yield is 6.5%. What am I missing?
So far so good with the fund. But the risks you outlined makes you think. A possible stop loss could mitigate some of this risk. The income characteristic is compelling. Once again a small position can generate enough income with minor fear of loss
Good points. When properly understood and utilized it can be an effective part of a greater strategy.
@@nicklaforge
You don't quite understand how vix futures work. SVOL is short some of those futures, it's 'poised' to be a money-making machine because they 'decay' (lose value and behave like out of money options that expire worthless). Risk of going to zero is close to zero (existing only theoretically).
Interesting take. Would be great if you can do an update video on svol bd Jepi/jepq in a year and see if the outperformance holds up.
here is the comparison of SVOL VS SPY. Svol has beaten SPY by wide margin. these numbers are based on dividend re invested
SVOL SPY
Start date: 05/13/2021 05/13/2021
End date: 05/24/2023 05/24/2023
Start price/share: $25.15 $410.28
End price/share: $22.02 $411.09
Starting shares: 397.63 24.37
Ending shares: 518.28 25.12
Dividends reinvested/share: $6.23 $12.26
Total return: 14.12% 3.26%
Average Annual Total Return: 6.72% 1.59%
Starting investment: $10,000.00 $10,000.00
Ending investment: $11,411.50 $10,325.44
Years: 2.03 2.03
..the longer you hold the fund the greater the potential for loss...? Can't that be said for everything you own? Started buying it when it was at $27. Cost basis is now less than $22 thanks to drip. Curious as to how much of the boiler plate stuff is required by lawyers. Since I invested in this as an alternative to cash I have received in excess of 1% per month. I also love trading options and really like buy write strategies.
Exactly! Investment bankers have been doing this same strategy for years and years.
Thanks Nick, I’ve been considering this fund for some time but haven’t gotten into the nitty gritty of what is really going on under the hood of this thing. Your review was much needed and appreciated.
This fund is similar to XIV, which exploded in Feb 2019 due to a spike in the VIX. The difference w/SVOL is they have a waay out of the money call option on the VIX at 60, designed to protect the fund if the VIX would spike.
It was Feb. 2018
SVOL only shorts 25% of the VIX, so not as risky as XIV which was 100% short the VIX
@@Trader_65-OT🙄
Great Video for all those people that don't read prospectus notes. Read people!
There is a very new fund, OARK that writes OTM CC on Cathie Wood's Ark fund...it seems to have insane yields. I wonder what your preliminary thoughts might be there. They also have one with Tesla stock and plan on launching more similar funds. I am seriously considering putting some amount of money there. Kudos, thanks for explaining SVOL, I was considering it, but I only want maintenance free, moderate risk passive income.
Yielmax is all im currently buying lol
There will be 14 or so more yieldmax funds coming out. The next ones are on apple and Berkshire
@@JOHNHSMITH2 I just bought TSLY and it went down today, but Tesla also went down. Love the 61 percent dividend.
@@robertsmith6408 me too !!! Love it
Thanks for your video, great job by actually reading through the SVOL's prospectus important details. I had invested in this fund for the last 3 months. The hi yield is excellent. However, the fund tells you it's for short term investments. More troubling though is tells you at least twice you " could potentially lose the full principal of his or her investment within a single day". That's too much risk for me, I'm getting out of this.
Selling volatility has been a secret strategy of some major players for many many years. This fund is just copying the strategy that made investment bankers a LOT of money! They also say selling naked puts is super risky but tell that to Goldman Sachs! I am holding long term so check in with me 10 years from now, hehe
I'm not sure I'm calculating this correctly - but - if only 25% of AUM is in short VIX futures, the long calls are at VIX = 50 and VIX currently trading at 17.5, then how much is lost of VIX jumps from 17.5 to 50? It seems like the entire portfolio would be down 50% prior to the long calls kicking in
If anybody is still looking at this, why can't you figure out the Delta and sell some mini or micro /VX futures to hedge SVOL, since it pretty much follows the the S&P around like a puppy, and collect the big dividend?
while hear on you on risk they are effectively hedging and delivering dividends consistently ? why ? he spike in Vox is their downside they dont make themselves as an end all but they keep delivering income at .32 per month while NAV has not free fallen has it ? Complex yes but do they perform ? Are there eating their own cooking ? it seems they are .. are losses recoverable?
I have one issue with your report. I didn't see the scenario in which SVOL would lose it's value. I've seen where it has what can only be described as a built in stop loss in our the money calls and puts to prevent this catastrophe outcome.
Please educate me if I am wrong. Sincerely trying to learn Incase I missed something when I did my analysis only two months ago.
That should say "out the money. ". Fat fingers on a little keyboard.
that’s a dangerous mindset to have, of course Svol can easily lose value, it is down over 15% since inception date.
At its core Svol can tank during unexpected large spikes in volatility due to numerous factors. It can also lose value anytime volatility isn’t falling. The option overlay seems to help, but things tend to work until they don’t, look at nusi as the poster child of this.
As the documents say, this is not meant to be held long term, it is intended to short volatility. If the market is indeed back to a bull run, Svol’s specific strategy will not work in that market.
Thanks nick that gave me a better understanding of svol
Could you do a review on another ETF that simplify just put out called HIGH it invest in treasuries with a covered call overlay it seems like an interesting one alternative I’d like to know your opinion on it. Thank you.
i am so glad that i watched this video .....this ETF IS VERY VERY VERY VERY sensetive tO black swan events
You could use it to short the VIX while getting a premium potentially but there is a better way to do that through SVIX the -1x VIX futures ETF. Why get only -0.2-0.3 with a lot more risk when you can swing SVIX for a higher return on crashes in volatility
I’ve only owned for 3 months (103 shares). Been making good dividend but! This mth the principal went down almost what the dividend payment was. Qrmi went even lower then the dividend payment 🤷🏼♂️ holding for now
SVOL has been great for me. I buy more every month, and I'm in the green. I also have HYLD-U where this ETF holds JEPI.
Great video!! Thanks for breaking it down !!! These past few days watching my crypto portfolio decline is very disheartening. Holding doesn't really profit much,. Any ideas on how to earn better on the short run?
Son bought Crypto and he lost out on some of his investment. I told him not to invest in Crypto. I just bought shares of TSLY, it sells cover call on Tesla and pays a 61 percent dividend.
I would love to hear your breakdown on the 2 new monthly income ETFs... YieldMax Option Income ETF OARK with a Current Yield of 55.70% As of 03/21/2023 & YieldMax Option Income ETF TSLY with a Current Yield of 67.30% As of 03/21/2023
Working on it!
@@nicklaforge Great! Thanks in advance Nick!
All risk factors.must be exhaustive and they are not lying as far a sim concerned Volatility can be harvested can it not ?
always learning
Helpful video. Thanks!
Narrator Voice: The Expense Ratio got more Terribad.
your arguments are good but inflation outpaces the RFR
I start buying when VIX hits 30 and accumulate until it reaches 40, then wait until it drops to 20 and I get out. Monthly dividend is what make me NOT to panic.
I like that approach
1. When VIX goes to 30 you aren't buying SVOL, you gonna be shitting your pants and expect it to go to 40.
2. VIX can stay low for LONG periods of time (it's long term average is 14), and while you're waiting for vix spikes to enter SVOL is gonna make money for others: Time IN the trade is more profitable than trying Timing it.
@@ivantsanov3650 Thanks but 1.historically VIX didn't stay long for 40, odds are it will go back to below 30 level relatively sooner, so I would gladly buy(accumulate) at 30+
2. VIX can stay low for long, yes, that's why I don't own SVOL. Simple.
The probability of SVOL to go to zero is near zero, theoretically it's there (but reality is different)
Theoretically any stock on the market can go to zero.
If it's not to held for over a day WHY IS IT GIVING OUT DIVIDENDS??? Thats an oxymoron
It is hard to understand and seems very risky, so I am not buying.
Better in Medical Property Trust
2022 was a testy enough year. You should give it more credit. You sound very dismissive
These risky strategies have not been proven over time
JEPI s eln by credit suise is risky
Thought it was JP Morgan
@@Pauln71 jepi has an eln issued by credit suise. Know what you hold.
Weekly elns nun to worry definitely better than svol
Buy yieldmax 60% yield. TSLY OARK
I own both those as well. So far the dividend is great but the share price drops farther. Currently a yield trap. Hope that changes.
@@jasonhouchins1230 what are you talking about? Im up 7% in 2 days!
@@jasonhouchins1230 Why do you want the share price to go up ? I hope it tanks
Big time dividend trap that is extra high risk compared to even SVOL.
@@OldLion64 how?