VIX® futures provide a pure play on implied volatility independent of the direction and level of stock prices. VIX futures may also provide an effective way to hedge equity returns and to diversify portfolios.
The CBOE Volatility Index® (VIX) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices.
Roll return is generated when expiring futures contracts are replaced with new contracts.
Stop-loss orders sell an investment when it hits a specified price. They are designed to limit an investor’s losses on an investment.
This article was written by Invesco PowerShares Vice President, ETF Product Management, John Feyerer.