No one seems to want to buy volatility. The largest exchange traded product indexed to VIX futures fell more than 3% on Tuesday and is languishing near its 52-week low.

The $1.8 billion iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) has been trading lower the past three weeks along with the CBOE Volatility Index, or VIX for short. However, investors need to keep in mind the ETN doesn’t perfectly track the performance of the spot price, since it follows VIX futures contracts.

The VIX dropped nearly 6% in recent trading Tuesday as the Dow rallied over 100 points. [VIX ETFs Sputter as S&P 500 Tries to Break Range]

Known as Wall Street’s fear index, the VIX measures the implied volatility of options contracts on the S&P 500. It tends to move in the opposite direction of stocks, and rises when investors are seeking protection in the options market.

Some investors use VIX-futures exchange traded products to speculate on market weakness or hedge, although these volatility funds took a reputational hit recently when the premium collapsed in VelocityShares Daily 2x VIX Short-Term ETN (NYSEArca: TVIX), catching some investors flatfooted. [What Really Happened with TVIX]

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