Well, Tim was right. Boehner blinked, the government’s back open, and the S&P 500 hit a record high Thursday, rallying on news of the latest increase in the US government’s credit card limit.
When there was still some uncertainty about how the standoff in DC would resolve itself, volatility began to rise a bit. From Tuesday, October 1st, to Wednesday, October, 9th, the iPath S&P 500 Short Term VIX Futures ETN (VXX) climbed more than 15%. At that point, I posted a hedge for VXX longs looking to add some downside protection (“Getting Paid To Limit Your Downside On VXX“). In this post, I’ll show how that hedge reacted to VXX’s post-deal drop. (more…)