A $2.1 billion volatility-linked exchange traded note rose above its 50-day simple moving average on Tuesday for the first time since November 2011 as stocks retreated for the third straight day on fears Greece will drop out of the euro.

The iPath S&P 500 VIX Short-term Futures ETN (NYSEArca: VXX) gained 5.3% on Tuesday on above-average trading volume.

The ETN is designed to track the performance of a benchmark of CBOE Volatility Index futures contracts – it does not replicate the VIX spot price.

Some investors and traders use volatility-linked funds to speculate on market pullbacks or hedge long positions.

However, investors need to understand that VIX-futures exchange traded funds and notes can be hurt by so-called contango in this market, when later-month contracts are more expensive than the current contract. [Caveat Emptor – Volatility ETFs]