Effective at the close of trading Tuesday, SVXY will now seek results that are half as much as the reverse of the index in a single day. So if volatility rises 10 percent on a given day, the fund will only drop 5 percent, not 10 percent as it would have dropped before.

Meanwhile, UVXY was designed to magnify the movement of volatility and it will also see its leverage reduced. It will seek results that correspond to one and one-half times (1.5x) the performance of the index for a single day, rather than two times (2x). So if volatility goes up 10 percent, the fund will rise 15 percent, rather than the 20 percent it would have risen before.

The VIX, or so-called fear index, 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.

“This is unprecedented, it’s the first time I have seen anyone change the leverage, particularly since it just happened overnight,” Pravit Chintawongvanich, head of derivative strategies from Macro Risk Advisors, told CNBC.

 For more information on the CBOE Volatility Index, visit our VIX category.

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