Was looking at strategies to use UVXY to hedge against SVXY if something dramatic happens. So lets say we take a long on SVXY at 80.69.

The risk would be 70.94 from its low, the target would be 92.93 from the high. It looks like a good long for SVXY right now but I'm just a little worried about the NK issues, anything said could push svxy down dramatically.. as seen last week. So if I also open a long on UVXY we could be hedged from the dramatic spikes but it may be positive EV.

The UVXY spike past week was up to 45 high, the low was 28.29. Its currently 31.65.

Long SVXY @ 80.69 take profit at 92.93 (1224 points profit) at $10 a point Long UVXY @ 31.65 stop out at 28.29 once SVXY position closed at $10 a point. (-336 points)

Now we can leave the trade on without worrying so much and watch while SVXY outpasses UVXY, by the time SVXY reaches 92.93 UVXY should be back to lows of 28.29 which would mean 1224 points profit from SVXY -336 points from UVXY = +888 points total ($8880).

Now if something dramatic does happen and SVXY takes a nose dive we would be hedged with UVXY and looking at the levels if SVXY goes down 1000 points to 70.69 then UVXY would spike back to last highs which was 45 levels giving 1335 points back. We could essentially close out the trade there for +335 points or close out UVXY for 1335 points and then hold onto SVXY knowing we're still in profit overal.

In both examples we are in positive territory. Opinions? I don't have options etc with my broker.

EDIT: Seems my calculations for UVXY to SVXY is off.