SVOL offers an amazing 16.76% Yield... But is it safe? Will it survive VOLMAGEDDON 2.0!?

[@wealthadventures]

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[@ivantsanov3650]

Will be no 'volpocalypse'. 0DTEs are not used to calculate VIX, they actually made it less 'volatile' (safer). Look what VIX did in the October 2022 low and what happened to SVOL (everything is perfectly fine)

[@maximumoverload5134]

Where can one find the true value of the vix ?

[@ClintonSiegel]

Given the events this week (unwinding of yen ‘carry trade’) I had to revisit this! Thank you so much for the excellent information and key considerations. Oh, and of course the great humor! Highly appreciate the content and insight.

[@wealthadventures]

Same here. I reached out to Simplify about SVOL and hope to do a follow up. Thanks for watching!

[@tprincipato]

Always interesting to look at these reviews a year later. Fair coverage. I am glad i got in to this and is has its place in my top 3 holdings. Passed the recent VIX spike with ease!

[@jimm4260]

I"ve had it for a year now... it broadly follows the S&P but does fall behind when S&P growth is pretty aggressive. Principle is positive from when I bought it and it pays the 16+% dividend faithfully. With the protective collars, I'm good with it and would encourage others to consider it, especially if you're a dividend guy like me....

[@gabriellobo25]

It’s pts out good ever mouth . I make around $616-$620 from Svol with only 50K in it . I love it

[@ACR4008]

I would love to see what’s happening after last Monday’s VIX spike.

[@JAVAR11]

Thanks for the video. One comment, SVOL is different from the ETNs that exploded during volmageddon (XIV and SVXY) as SVOL only holds a short position of -0.2x to -0.3x the inverse of the VIX compared to XIV or SVXY that were short 1x the VIX.

[@wealthadventures]

Good point!

[@sdiver68]

Thank you! It occurs to me it would not be hard to model Volmeggeddon impact. So I'm not sure what is "unknown" about that scenario? When I say "not hard", I mean with a small team of finance wizards and data scientists dedicated to this model. I hope Simplify is doing exactly that and has a gameplan in place for every foreseeable situation.

[@bernardclements]

Nice presentation 💯💯💯

[@guidogonsman3423]

"Will it survive VOLMAGEDDON 2.0!?" Yes it will, Sir !

[@MartinD9999]

Thank you! I’m curious about how you feel about SVOL now that 6 or 7 months have passed. I know you’ve added it to at least 1 hypothetical portfolio example uses in 1 of your videos so I just assume you hold this ETP in a favorable light. Anyways, an update would be great.

[@wealthadventures]

It has held up really well with solid performance. Only concern is for that next volatility spike that will happen at some point. We just have not seen one of significant size since it was introduced. I do own a small position and will likely keep it that way.

[@richardthorne2804]

You did a really nice job with this overview. I belong to an investor discord where i see this traded quite a bit. 👍

[@wealthadventures]

Thanks! I get asked about this one a lot.

[@shaneomack5018]

We jumped on pretty heavy on svol in Oct 2022 when it was 20.74 and putting $100 a week into it and rolling the divs each morning month into jepi. It’s been a atm machine. Clearly just like any high dividend etf or stock it could crash or it can crash but he’ll even a great stock like O is struggling the last 2 months too.

[@wealthadventures]

Nice!

[@disco4535]

JEPI's div is down to about 6%, and I think it was over 10% at one point. How much more will it go down? JEPI's NAV falling isn't as big of a hit to it's div yield as it is for SVOL's though

[@wealthadventures]

@@disco4535 Hi. It should follow the VIX fairly closely. Low VIX, low yield. Hi VIX, high yield. That is generic but will often tell the story.

[@gabriellobo25]

Svol is changing my investments every mouth . I make around $615 - $620 a mouth with only 50K invested in to Svol . My gole is to be making 1K a mouth from Svol. Ever mount I get paid so far and i reinvest it . I love it

[@wealthadventures]

Nice!

[@clairechen3592]

Month dude

[@bluesky5587]

Goal

[@davidanderson7460]

he may not be a native English speaker @@clairechen3592

[@jaimemchucari7004]

Shut ur month ​@@clairechen3592

[@cryptkeeper4507]

Between Nov 2021 and Nov 2022 the Vix spiked over 35 several times. From peak to trough SVOL dropped approximately 29% during that time but kept paying dividends. On the flip side SVOL has performed very well in the low VIX environment that we have now. The share price has increased while maintaining the dividend payouts. It will be interesting to see if the calls are enough to protect it during a massive spike in VIX.

[@headlibrarian1996]

Did SVOL NAV recover from that or was that a permanent loss?

[@cryptkeeper4507]

​@@headlibrarian1996It recovered some of it. The share price is still down over 9% since it's start date according to tradingview charts.

[@gmv0553]

​@@headlibrarian1996it recovered.

[@emcardleinvest]

Great review - please do HIGH next!

[@wealthadventures]

Coming up!

[@Nintendo64nerd]

Made by monkeys, made for monkeys. Total returns on HIGH are deep in the red

[@JustAnotherPersonHere]

Hey Dave, love your channel and have been watching all your vids (including ads) for several months now. You mentioned JEPI & JEPQ, which I also hold and like, would you have thoughts on SPYI ?

[@wealthadventures]

Hi. Here are my thoughts on SPYI: kzbin.info/www/bejne/eqbXpXyer6dop6M New fund that I am watching but not jumping into at the moment.

[@calledout4437]

Glad I watched this. I'm selling all of my SVOL now haha.

[@wealthadventures]

😱VOLMAGEDDON!

[@davidosicki2202]

Thanks for another great and informative video! I've been watching SVOL lately too and based on your info I believe I will continue to be patient and watch. Really like my JEPI and DIVO and appreciate your periodic updates on those! Curious what your take is on bond funds for income, like PONAX? Or do you stick with the covered call ETF's only for income? Like you I'm 53 and trying to build a strong and safe income portfolio for retirement.

[@wealthadventures]

I do own some SPHY and HYD. I have not looked at PONAX before.

[@asag1225]

Something new. Thank you for sharing!

[@wealthadventures]

Welcome! Thanks for watching.

[@tonyscinemascope]

wait a minute, i just heard you say a good entry point. what's a good entry point? and how is that determined? just wondering

[@wealthadventures]

Thanks for watching till the end! 😃There really is not a "good entry point" but I don't feel any pressure to buy this fund since cash is earning 5%. At some point I will add some shares. Perhaps after that next VIX spike.

[@slickwilly4613]

Could you please explain to us non futures folks how a large loss is permanent or not? Here is my example. if the SPY (S&P 500 etf) goes from 500 down to 300 then back to 500, if you didn't sell then no money is lost. But futures have to sell short term. Wouldn't that lock in the loss permanently? The reason I ask is that most income investors such as myself buy and hold these ETFs, not swing trade them.

[@wealthadventures]

A VIX spike will drive the VIX futures up in value. They will need to be settled and they will lose on those contracts with the loss based on the magnitude of the spike. However, the call options that are in play will become valuable and the fund manager believes that they will offset a serious spike. I imagine that they will try and unload the options and the futures. Sounds simple enough but management of all that could be tricky at crisis time. Each spike will be handled a bit different since the options change along with the magnitude of the spike. Does that help? Really depends on the management of it and we have not seen much intervention needed since the fund began.

[@slickwilly4613]

​@@wealthadventures Take a reg ETF. price drops from 200 down to 100. Then a month later raises back to 200. As a buy and hold, i lost no money. But this ETF is prob not the same. if the price drops, and a futures contract expires , you lose even if you never sold. that a thing?

[@wealthadventures]

@@slickwilly4613 Yes. Put the fund buys options that should offset the loss on the futures. That is the goal.

[@slickwilly4613]

@@wealthadventures Don't think you answered my question. If the SPY drops 20% then a few months later its back to where it was, had I not sold, I would not have lost anything. With futures, wouldn't the contract expire and the fund would be forced to sell at the bottom? I am not talking about an epic crash that the VIX goes past 30 mind you. I just dont understand how futures work in an ETF.

[@wealthadventures]

@@slickwilly4613 They sell VIX futures. Lets say for 20. If the VIX spikes, they have to buy them for 60. The fund lost 40 in this case and they roll out to a future date buying them at 20 again. At the same time, they also buy VIX call options for 10 which end up increasing in value to 50 so when they sell these it offsets the loss in the futures contracts. The fund value did not change. That is the generic VIX spike. Typically, the VIX does not spike so the futures are sold for 20 and rolled later for 10 out to a future date providing the profit while the call options lose value but cost less.

[@fialee8ca132]

Seems like FEPI is a better option (pun intended) since it offers a similar yield, but with more capital appreciation upside since the etf actually owns shares vs a pure options play. Thoughts?

[@wealthadventures]

I agree... but SVOL has performed quite well since inception.

[@fialee8ca132]

@@wealthadventures Thanks. I'm prob going with QQQi... I like the idea of having shares vs pure option play even if the returns are lower, and sprinkle in some FEPI to juice the dividends. I might buy a tiny block of SVOL just to see how it performs.

[@editingmachine]

Your content is 100%. With a bit more time, this channel will be 🚀

[@wealthadventures]

Thanks!

[@SilverGoldComics]

The question I was hoping to have answered is, if the market crashes, would SVOL be expected to rise big, fall big, fall at a smaller rate than the overall market? Thanks

[@wealthadventures]

Hard to say until we have that crash. If we get a substantial increase in volatility, the futures will be closed for a loss but the options should provide some relief and show a profit. The fund manager thinks the options will cover the loss from the futures.

[@armchairincomechannel]

This is one of the better explanations of SVOl; a complicated fund!

[@wealthadventures]

Thanks! Much appreciated.

[@sactojlm]

Not clear on whether, or the extent to which, the amount of deep out of the money calls saves this ETF from catastrophe if the VIX rises to say, 50 or more. How much protection do these calls provide? Your video doesn't provide an answer given the current price around $23 .

[@wealthadventures]

Hi. Great question and a sticking point. It is hard to calculate and will change as the manager makes adjustments based on strike prices and quantities. When backwardation occurs (where near term futures are more expensive) and the long calls start to increase because the VIX is spiking... Well, I see this becoming a difficult time and the manager will have to make some decisions... maybe quickly. He will have to decide when to take profits in the options and a spike to 40 vs 60 vs 80 will all be a different animal. The plan is that the options should cover a "large spike" according to the fund manager... but as Mike Tyson said "Everyone has a plan until they get punched in the mouth". It will be an interesting day!

[@brucef1299]

Thank you. I've been curious about this one. I'll have to set up a $10 weekly nibble in my play account and watch how it goes before deciding if it's Roth worthy.

[@wealthadventures]

Sounds like a plan Bruce.👍

[@just.bob.j]

Those funds that lost 90% of value, how are they today? Did they recover?

[@Normanrs2004]

I'm looking at a VIX index chart since 1990. Intuitively, spikes don't last long. So I'm not seeing how the price drop of SVOL wouldn't be merely temporary. Isn't it only at risk if there were a long-term elevation in volatility?

[@wealthadventures]

SVOL is harvesting volatility in small chunks selling out on the curve and closing/rolling at a later date. Any backwardation of the curve could be harmful since they want to roll these as they get closer to spot VIX. If VIX becomes extremely elevated it can be quite expensive to close those contracts. Historically it does not stay elevated for too long but that does not mean it won't... and elevated VIX could wreck the income of the fund for a period of time. Just some thoughts!

[@samiam8114]

I find that betting against fear for a profit to be very satisfying, so I love SVOL.

[@wealthadventures]

Ha. I like it.👍

[@matteofoglio9988]

Are JEPI and JEPQ particularly susceptible to volmageddon?

[@wealthadventures]

They would suffer in the sense that a VIX spike typically coincides with a market decline. It would hit the underlying assets.

[@emphyrio]

Have to re-watch yr vid later next week. At this moment l will not get on board as l think a small increase of the vix will not be good for this fund, and vix is now sub 14 if l’m correct. But maybe l’m wrong, that’s why l have to watch this video again, thanks!

[@wealthadventures]

It is certainly not needed in a portfolio. It should handle small changes in the VIX perfectly fine. It is the spikes that will make it interesting.

[@fabiGBOtown]

Buddy buddy buddy i really messed up. I was writing a sell to open put option in order to buy T shares and when I was looking at the option chain (on fidelity) I looked on the right side "puts" and I saw that if I placed an order to buy at 16.50 (shares were trading at 14.51), I would collect a 203 dollar premium so I got excited. I called the options department on fidelity and they confirmed buy put sell to open at 16.50 was 203 premium. in hindsight, I kinda wish they would have warned me that it would fill/execute instantly because of the price difference but they didn't so I learned a lesson the hard way. So I'd like to ask you a question please, I now own 100 shares of T at 16.50 and im pretty sure as this gets close to ex dividend date, the price will at least get back to that price, but the goal was to write covered call options and keep collecting small premiums, how should I go about this now? Do I just write covered calls way out the money until it gets closer to the ex dividend date or do I do something else? I'm pretty sure no one has admitted to a mistake like this publicly but I don't mind, im learning and I could use some help, if you can of course, don't have anyone else to talk to about this stuff lol. Just for context, I am trying to do the wheel strategy and this is tax deferred. Would Reaaaallly appreciate your reply, I just hope this was easy to understand. Thanks so much.

[@wealthadventures]

So you sold a put for $203 and were assigned 100 shares at 16.50. Right? That would mean your breakeven is 14.47. If that is correct, you could sell a call (sell to open) at maybe 15, 16, or 17 and start your wheel. You could sell for an expiration a week prior to the next Ex-Div date and setup for your next call provided that one expires... or roll prior to expiration if above the strike. Sound good?

[@fabiGBOtown]

@@wealthadventures yes, that is correct although I'm not sure how you calculated the breakeven (a topic that I am researching). Just to make sure I understand, you don't recommend i sell covered calls now out of the money but instead, to wait until until we are bear the ex dividend date to start selling? Obs. I called fidelity to find out when the next ex dividend date is and they don't know it or at least the guy who answered doesn't know where to find it. I guess thats my follow up question to you :) 😃 thanks in advance

[@wealthadventures]

@@fabiGBOtown Next X date will be around first week in Oct. You don't need to wait for this date but be aware of it with your plan. Sorry to see T this week! And VZ, which I own.

[@fabiGBOtown]

@@wealthadventures yea, what a beating T took lol. Im thinking of buying more to be honest. But what do you think this does in the near future? Vz bounced and I read some positive articles about it today. To sell calls on this, im gonna make 10-20 bucks at most if im reading this right. Then 68 cents to fidelity. Today, it settled on fidelity and it says my cost base is 1447.00 but I paid 1650.00, is that 1650-203? Im so confused, the more I read the further away from what I want to understand I get. I try to ask as much as I can in one comment, sorry about that but know that im really grateful. Thanks

[@wealthadventures]

@@fabiGBOtown Hi. That is right. You were assigned the shares at 16.50 but received 203 so 1650-203 or 16.5-2.03 on a per share basis. T popped back up a little. We just don't know the impact of the lead issue.

[@user-mu4sm4nb1d]

Hi thanks for the video. I tried to buy SVOL today, but Vanguard wouldn't let me. The sign said, "Buy orders are not permitted on leveraged and inverse products."

[@wealthadventures]

Vanguard protecting you!... From non-Vanguard. Is this a retirement account?

[@user-mu4sm4nb1d]

Yes, a Roth@@wealthadventures

[@randallmanring1661]

Hi Dave...would like to see you revisit SVOL at some point. I like how it's been behaving during the recent S&P/Nasdaq correction with reasonably low volatility compared to VIX. Are you seeing anything different??

[@wealthadventures]

No. It is doing well. We still have not seen a significant VIX spike to really test it but I'm happy with the performance. They continue to harvest the VOL!

[@badass6656]

If SVOL is selling volatility are buyers of volatility paying too much if so why wi they continue t do so?

[@wealthadventures]

Sometimes people buy as a hedge against a long equity position and sometimes speculation. If you are right, you can have a huge return which is tempting for many. For example, buying VIX calls in early 2020 would have made you a ton by March 2020. However, as an investment, I look at it like trying to beat a slot in Vegas.

[@badass6656]

@@wealthadventures So writing or sellers are at risk of an occasional large loss in return for expected smaller consistent returns. Is it just luck that SVOL has not gone through a period where it will be exposed to a large loss?

[@wealthadventures]

@@badass6656 That is pretty close! SVOL sells futures out on the curve about 3 months and closes them as they get to about 1 month . That is usually a profitable trade except when volatility spikes. If it does it can end in a large loss. In order to protect the fund from this, they buy cheap VIX call options. These should kick in on the occasion when the VIX spikes but to date I don't believe they have been needed. It is hard to gauge their impact until we see a big spike.

[@echoeversky]

Now that Credit Suisse stole $28B by tactically defaulting during their buyout shenanigans you should do a joke review the ETN riddled USOI. :3

[@just.bob.j]

Or, what are those two funds that lost 90%?

[@wealthadventures]

Hi. SVXY is still around. XIV was the other. I have not looked closely at SVXY but the chart illustrates the story well back in the beginning of 2018.

[@briangemmet3567]

60% of the time it works every time

[@wealthadventures]

Ha! Absolutely... like my stock picking.

[@josephemerson2893]

SVOL is a dividend machine

[@amynycity]

So what is a good entry point?

[@wealthadventures]

Its all about timing the market! 😆A spike in the VIX could offer an opportunity.

[@geezusfreek1]

Hows it working now?

[@wealthadventures]

Rebounded quickly!

[@jameylane1591]

Sex Panther....that was good. I heard SVOL uses real chunks of Panther.

[@wealthadventures]

Sex Panther is always good.

[@rhoelg]

This ETF is very complex but ingenius! 🎉

[@wealthadventures]

Agree. Creative alternative asset.

[@torchy187]

This thing will get absolutely crushed when the VIX spikes. SVOL would be great to nibble “after” VIX spikes.

[@wealthadventures]

It will be interesting to see how that first big spike is handled.

[@jdavis6650]

2 Seconds. Yes.

[@tonyherdina9142]

May 2024, the yield has dropped to 14.75%. Then you have that high expense ratio.

[@wealthadventures]

They do get paid for harvesting volatility and volatility is low at the moment. I'm okay with that!

[@goedelite]

Many of the youtube video clips play at faster than normal speed, making it necessity to download the video and play it back at reduced speed. This is a huge waste of time and effort for the viewer, and I do not play that game. SLOW DOWN TO NORMAL!!!

[@cliffdariff74]

Hey Genius... there's the round button on the KZbin video in top right hand corner. Shaped like a GEAR. push that button and you, yes even YOU, will SEE the Playback Speed choices...!

[@Sylvan_dB]

No thanks. TANSTAAFL and this one smells like there are a lot of unknown unknowns that could be catastrophic.

[@wealthadventures]

Grab some popcorn for that first big spike.