On June 4th, 2024, Volatility Shares introduced ETHU, an Exchange Traded Fund (ETF) offering 2X leverage on the daily percentage moves of the ether cryptocurrency. This post will review ETHU’s architecture, operational characteristics, likely risks, possible rewards, and potential trading strategies. A simulation of ETHU back to 2017 provides some insight on how this Exchange Traded Fund (ETF) might perform in the future. Before we …
On June 27th,2023 Volatility Shares introduced BITX, the first 2X leveraged Bitcoin Exchange Traded Fund. This post will review BITX’s architecture, operational characteristics, likely risks, possible rewards, and potential trading strategies. A simulation of BITX back to 2014 provides some data on how this Exchange Traded Fund (ETF) might perform in the future. Before we get into the specifics of how BITX works, I’m disclosing …
Volatility Shares’ next UVIX reverse split, will be a 1:10 reverse split, and will occur 15-Jan-2025 (press release). Since its inception in March 2022, UVIX’s decay rate has averaged around 20% per month. Some investors anticipate significant price moves in UVIX motivated by a reverse split. I’m not in that camp. UVIX’s price is tied to VIX futures’ price, which couldn’t care less about UVIX’s share …
Arbitrage processes associated with Exchange Traded Products are normally invisible to investors but are essential for ETPs to trade as they are intended. This post describes these arbitrage processes in detail and explains how they can (and have) gone wrong. Exchange Traded Products (ETPs) enable stock-like trading of collections of securities that would be more difficult, or impossible to trade directly. For example, it’s not …
This post will discuss how UVIX works, including how it trades, how its value is established, what it tracks, backtest simulations, tax treatment, termination risk, and how it is likely to perform. VolatiltyShares’ 2X Long VIX Futures ETF (ticker: UVIX) started trading on March 30th, 2022. After a gap of three and a half years, volatility traders regained access to a nationally traded, 2X leveraged …
