VIXY topped out on Friday, in after hours trading. However, VIX and VIXY have not seen the large drop which we are accustomed to seeing after a bump. Certainly they have fallen, but they are still seeing a lot of support.
Consider the various price levels of VIXY depicted below.
Currently VIXY seems to be trading between $14.25 and $14.66, even with the current VIX F1 contract expiring today. While the new F1-F2 term structure will be in contango, F2-F3 contango is a mere 1.52%, meaning that VIXY could go either way. This is why, even though I sold off my VIXY position, as mentioned in last week’s “End Of The Week Wrap-Up,” I do not consider XIV a solid trading option right now.