For a security doomed to decrease in value over time Barclays’ VXX does amazingly well. Its volume averages over 8 million shares per day and its assets under management had stayed around $800 million to $1.5 billion until an ugly 2022, were it had to cease share creations for 6 months due to a regulatory problem. Now its assets are at $300 million, still not …
You can find Barclays’ VXX prospectus here. The prospectus covers both the short term VXX, and the medium term VXZ. This post discusses going long on VXX. This post discusses some choices if you think VXX is going to go down. For an estimated date for VXX’s next reverse split see this post. For an overview of how VXX works, see “How Does VXX Work?” …
VXX options offer ways to take either long or short volatility positions. Unlike most securities VXX tends to go up when the market is down—which leads to some signficantly different options characteristics. Comparing VXX options to VIX options: Similarities: Both are ultimately based on the Cboe’s VIX futures Will show a strong reversion to baseline behavior when the market is behaving itself—the VIX index and …
Unlike the S&P 500 or Dow Jones Index, there is no way to directly invest in the VIX index. I’m sure some really smart people have tried to figure out how to go long or short on this computed volatility index, but there’s just no way to do it directly. Instead, you have to invest in a security that attempts to track VIX. None of …
