Mostly quiet on the volatility front

There haven’t been any new volatility ETNs or ETFs introduced for almost 4 months now, so it is about time for another wave.  In April options were introduced on VelocityShares VIIX  (a VXX wannabe), but it’s hard to see how these can compete effectively with VXX’s options.

The funds that are attracting the most interest (and likely additional competitors) are VelocityShares’ 2X short term TVIX and their inverse volatility fund XIV.   The daily volumes on these two have been exceeding 1 million and 200K respectively, while the rest of the newer funds are lucky to get 10k shares per day.   ProShares VIXY (VXX wannabe) is the exception to that, with growing volume that is getting into the 300K per day range.   It is a mystery to me why it’s gaining popularity—perhaps because it is an ETF, not an ETN.

TVIX has a big lead over CVOL, which offers a similar 2X strategy and XIV is gaining ground over Barclay’s XXV and IVO inverse funds.   XIV’s leadership is not surprising— it’s a much better choice than XXV & IVO’s short VXX  approach.  I’ll write more on this in a couple of days.

For a summary of all the available volatility ETNs and ETFs see Volatility Tickers.

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