Exchange traded funds (ETFs) tracking futures based on Wall Street’s “fear gauge” jumped late Friday, suggesting investors were nervous heading into the weekend.
After the mid-March CBOE Volatility Index (VIX) spike, the index is back down near where it was in February. The exchange traded funds and notes (ETNs) that follow futures on this index are also moving lower. [Markets Feeling Brave As Volatility-Linked ETFs Plummet.]
The demand for “risk control” investment products is steady. There are over a dozen VIX-futures exchange traded products.
The VIX measures the 30-day volatility of an index of large-cap stocks. In short, it’s a calculation based on how volatile investors believe the markets will be in the coming 30 days. The S&P 500 and the VIX have a negative correlation: when the VIX is rising, the S&P generally declines; when the VIX is declining, the S&P generally rises. The index tends to be prone to wide swings after periods of calm. [VIX indexes Branch Out To Select ETFs.]
- ProShares VIX Short-Term Futures (NYSEArca: VIXY)
- ProShares VIX Mid-Term Futures (NYSEArca: VIXM)
- iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX)
- iPath S&P 500 VIX Mid-Term Futures ETN (NYSEArca: VXZ)
- VelocityShares Daily Inverse VIX Short-Term ETN (NYSEArca:XIV)
- VelocityShares Daily Inverse VIX Medium-Term ETN(NYSEArca: ZIV)
- UBS E-TRACS Daily Long-Short VIX ETN (XVIX)
- VelocityShares offers an ETN lineup that includes Daily 2X VIX Short-Term ETN (NYSEArca: TVIX)
- Daily 2X VIX Medium-Term ETN (NYSEArca: TVIZ)
ProShares VIX Short-Term Futures
Tisha Guerrero contributed to this article.