Just days after an unexpected surged in volatility sparked wild declines volatility exchange traded notes (ETNs), forcing the termination of one popular bearish volatility exchange traded note (ETN), the VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ: XIV), some traders are flocking to rival products.

Earlier this month, the VIX surged, but volatility exchange traded notes, such as XIV have a unique feature: The indexes these products track settle after the close of U.S. markets. In after-hours trading on Feb. 6th, XIV suffered catastrophic losses. The ETN’s market closing on Feb. 6th was $99, but its closing indicative price as listed on the VelocityShares website was just $4.22.

Data suggest traders are renewing their affinity for other inverse volatility products, such as the VelocityShares Daily 2x VIX Short-Term ETN (Nasdaq: TVIX) and the ProShares Ultra VIX Short-Term Futures ETF (NYSEArca: UVXY). UVXY is a leveraged ETF designed to provide 200% of the daily performance of a basket of VIX futures contracts. It doesn’t replicate the CBOE Volatility Index spot price.

“The VelocityShares Daily 2x VIX Short Term ETN, known by its ticker TVIX, took in more than $20 million this week, the first time the $300 million ETN has seen inflows this month, according to Bloomberg data. And the $210 million ProShares Ultra VIX Short-Term Futures fund, or UVXY, gathered $13.3 million, the data show. Both funds promise to provide twice the performance of the Cboe SPX Volatility Index,” reports Bloomberg.

Last year, traders argued that the VIX remained depressed because realized volatility in U.S. equities has diminished and economic fundamentals remain supportive. That sentiment sent traders scrambling into XIV and rival inverse volatility products. For example, XIV doubled in size in August.

“The funds had been hemorrhaging money since the equity selloff sent the VIX to its highest level in two years on Feb. 5. The price of UVXY, for example, soared as much as 71 percent that day, but then plunged by a record 33 percent in the following session,” according to Bloomberg.

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. ETPs that track VIX futures allow investors to profit during rising volatility or hedge against short-term turns. VIX exchange traded products track the VIX futures market, not the VIX spot price.

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

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.