Unloaded my VXX long call for $5.20 today. Overall

Unloaded my VXX long call for $5.20 today.  Overall on both trades I'm down roughly $100.  I'm not happy about it but the more I researched VXX, the less and less I liked it.  The collapse in TVIX this morning and my subsequent research into that debacle led me to believe that anything more than a very short term trade on VXX, TVIX, VIXY or other volatility instruments that dont EXACTLY track the VIX are best left to the pros.

In a nutshell: VXX does not track the VIX but tracks the next two months futures J2, K2, and to some extent M2.  If J2 is trading at say $19.50, then VXX should trade relatively close to that immediately following the roll from the previous month regardless of VIX.  The catch is that if the VIX stays near 15, those futures will naturally decay towards 15 which means that all things being equal, VXX CAN lose money if VIX stays flat.  This is why you have seen a huge drop in VXX over the past months.  VIX has stays flat but the natural decay  of futures contracts leads VXX to drop in price.  So if you are long on VXX, you better time it correctly or else get ready to slowly watch your investment get pummeled.  The fact that this ETN has a reverse split policy built into the prospectus should have been my first red flag and I should have done more research.

Lesson learned (cost me $100) - I'll never enter a security unless I am familiar with how it operates.  With all the financial trading tools out there, there is no reason to push the envelope and enter positions in securities that you have not researched.

Moving on.  I'll be doing my homework on GDX, SLV, GLD and a few other securities to see if the LEAPS diagonal strategy can be applied.