# @tastyliveshow on YouTube

- **Type:** Video
- **Original URL:** https://youtube.com/watch?v=Md4df0-ceE8
- **Gondola URL:** https://gondola.cc/posts/65858421-tastyliveshow-youtube
- **Thumbnail:** https://img.gondola.cc/tr:w-,h-,fo-auto/postThumbnails/285f2f4f64.jpg
- **Posted:** 2026-05-23T01:00:06.000+00:00
- **Account Owner:** tastylive (@tastyliveshow) — https://gondola.cc/tastyliveshow

## Caption

VXX looks like a simple way to bet on a volatility spike. Buy it when you think the market is about to sell off, collect when the VIX pops. The problem is the chart. It drifts lower almost every single day, requiring reverse splits just to keep the price above zero.

Tom Preston explains exactly why. VXX owns a rolling portfolio of VIX futures. When those futures are in contango, which they almost always are, VXX is forced to sell cheaper near-term contracts and buy more expensive further-dated ones every single day. That roll cost is the structural drag eating away at the position. Tom shows what the futures actually look like live on the platform and explains the one scenario where VXX becomes worth considering: backwardation.

Helpful links:
tastylive: https://www.tastylive.com/
Get Tom's pre-market analysis every morning: tastylive.com/newsletters
FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 
Follow tastylive on X: https://x.com/tastyliveshow

CHAPTERS:
00:00 VXX: The Popular Volatility Bet That Has a Serious Problem
00:24 VXX Owns a Portfolio of VIX Futures, Not the VIX Itself
01:06 The Roll: Selling June Futures, Buying July Every Day
02:03 June at 19.35, July at 21.10: That $1.75 Basis Is the Problem
02:40 Contango Creates Structural Drag on the VXX Price Every Day
03:57 Why VXX Has Had to Do Reverse Splits to Stay Above Zero
04:07 What to Trade Instead: VIX Futures Options Directly
05:29 Front Month Volatility Spikes First and Hardest
05:57 The One Time VXX Makes Sense: Backwardation
06:08 Backwardation Explained: Selling High, Buying Low on the Roll
06:52 Backwardation Rarely Happens Outside a Market Crash
07:36 Never Short VXX Naked: Keep Risk Defined Always
09:00 Final Rule: Trade VIX Futures Options Before You Ever Touch VXX

#cherrybomb #optionstrading #vix #impliedvolatility #optionsforbeginners #vxx #howtotradeoptions #volatilitytrading #optionsexplained #tastylive

tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we’ll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. 

tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. 

Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. 

tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.

## Stats

- **Views:** 670
- **Likes:** 34
- **Shares:** 0
- **Comments:** 2

## Tags

cherrybomb, volatilitytrading, tastylive, optionstrading, impliedvolatility, vix, optionsexplained, howtotradeoptions, vxx, optionsforbeginners

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