TVIX and other volatility products are geared to follow VIX futures, not the spot price. Therefore, they can be hurt by contango, or when longer-dated contracts are more expensive than the spot price. This causes the products to lose money on the so-called roll trade.
TVIX faced scrutiny earlier this year when it plunged after its premium to indicative value collapsed following Credit Suisse’s decision to halt the creation of new shares. [What Really Happened with TVIX]
Other volatility exchange traded products include iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) and ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY).
VelocityShares Daily 2x VIX Short-Term ETN
