For those portfolio managers whom hope to bet against the VIX without using options, VelocityShares Daily Inverse VIX Short Term ETN (NYSEArca: XIV) may be an interesting play.
The fund has rallied considerably from an intraday low of $4.91 a share touched last Tuesday, and volume on Wednesday was above average.
It is important for the manager to understand the effects of the daily inverse objectives of the fund, as well as limitations and opportunities of the fund to track its objective based on whether the VIX itself is in contango or backwardation.
We do however expect to see a pickup in activity in XIV as well as other VIX related products as volatility itself continues to be in play from a speculation and trading standpoint.
VelocityShares Daily Inverse VIX Short Term ETN (NYSEArca: XIV)
Chart source: StockCharts.com.
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