Hi,
Looking at the Example of Futures vs Underlying chart (VIX Index vs Adjusted Futures), does this means that if the trader shorted VIX Futures in 2004 he would have profited well come year 2017? Understand from the video that if he longs, he would lose money.
Course Name: [Futures Trading: Concepts
Hi,
As the video says, a trader who bought in 2004 and kept rolling his long position, would have incurred a loss of over 90% of his money. It is merely giving you a perspective of proper adjustments in trading.
But based on this premise, we cannot say that the opposite type of trade will lead to a profit. There are other factors to consider, including transaction costs as well as maintaining a margin. Careful consideration and hypothesis testing should be done before we can say that it can lead to alpha generation.
Hope this helps