With equities hovering near record highs and market hurdles ahead, investors may want to hedge their short-term risk exposure with CBOE Volatility Index-based exchange traded funds.
On the upcoming webcast, Capitalizing on Rising U.S. Equity Volatility with VIX Futures ETFs, Joanne M. Hill, Head of Institutional Investment Strategy at ProShares, Matt Moran, Vice President of the Chicago Board Options Exchange, and Ryan Dofflemeyer, Portfolio Manager at ProShares, will look at the VIX and ways to diminish equity risk or capitalize from stock market swings.
For instance, traders have a number of VIX-related ETF options to play short-term oscillations in the equities market, including the ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY), ProShares VIX Mid-Term Futures ETF (NYSEArca: VIXM) and ProShares Ultra VIX Short-Term Futures (NYSEArca: UVXY).
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The VIX is a widely observed indicator for investor sentiment in the stock market and measures the expected or implied volatility of large-cap stock options traded on the S&P 500 index. ETFs that track VIX futures allow investors to profit during rising volatility or hedge against short-term turns.
VIXY tracks the S&P 500 VIX Short-Term Futures Index, which maintains an average weighted settlement date of one month by rolling a portion of the position in the first month VIX futures contract into the second month VIX futures contract on a daily basis.
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VIXM tracks the S&P 500 VIX Mid-Term Futures Index, which follows longer dated VIX contracts by maintaining an average weighted settlement date of five months through rolling a portion of the position in the fourth month VIX futures contracts into the seventh month VIX futures contract on a daily basis.
UVXY tries to reflect the same underlying index as VIXY, except the leveraged ETF tries to produce the 2x or two times daily performance of the benchmark.
Alternatively, investors who expect the U.S. stock market to steadily strengthen with minimal volatility ahead can look to the ProShares Short VIX Short-Term Futures ETF (NYSEArca: SVXY), which follows the inverse or -100% daily performance of the same underlying index as VIXY.
Financial advisors who want to learn more about the CBOE Volatility Index can register for the Tuesday, October 18 webcast here.