With markets swinging and volatility rising in response to greater political uncertainty following the FBI’s renewed probe into Hillary Clinton’s private emails, investors may be turning toward CBOE Volatility Index, or VIX, related exchange traded funds to hedge market risks.
On the upcoming webcast, Trading VIX to Hedge Market Risks: What You Need to Know, Greg King, Founder and CEO of REX Shares, Vinit Srivastava, Managing Director of Strategy and Volatility Indices at S&P Dow Jones Indices, and Bill Luby Chief Investment Officer of Luby Asset Management, will look to potential risk events and outline hedging strategies based on the VIX index.
Investors who are concerned of a potential presidential upset may consider volatility or VIX ETFs to hedge against the political risks.
The VIX, or so-called fear index, is a widely observed indicator for investor sentiment in the stock market and measures the expected or implied volatility of large-cap stock options traded on the S&P 500 index. ETPs that track VIX futures allow investors to profit during rising volatility or hedge against short-term turns.
For example, the REX VolMAXX Long VIX Weekly Futures Strategy ETF (BATS: VMAX) and the REX VolMAXX Inverse VIX Weekly Futures Strategy ETF (BATS: VMIN) can help investors track VIX up and down movements. VMAX seeks to provide investors with exposure to the implied volatility of the broad-based, large-cap U.S. equity market. VMIN seeks to provide investors with inverse exposure to the implied volatility of the broad-based, large-cap U.S. equity market.
VMAX and VMIN are the first regulated investment company funds to invest in VIX futures, and seek to track movements in the VIX Index by maintaining a weighted average time to expiry of their investments in VIX futures contracts of less than 30 days at all times. Potential investors should be aware that the ETFs track VIX futures contracts and don’t try to reflect the spot VIX Index.
Financial advisors who are interested in learning more about the CBOE Volatility Index can register for the Thursday, November 3 webcast here.