Why Arbitrage is Essential For Exchange Traded Products

Arbitrage processes associated with Exchange Traded Products are normally invisible to investors but are essential for ETPs to trade as they are intended.  This post describes these arbitrage processes in detail and explains how they can (and have) gone wrong.  Exchange Traded Products (ETPs) enable stock-like trading of collections of securities that would be more difficult, or impossible to trade directly.  For example, it’s not …

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How Does Volatility Shares’ 2X UVIX Work?

This post will discuss how UVIX works, including how it trades, how its value is established, what it tracks, backtest simulations, tax treatment, termination risk, and how it is likely to perform. VolatiltyShares’ new 2X Long VIX Futures ETF (ticker: UVIX) started trading on March 30th, 2022.  After a gap of one and half years, volatility traders have access to a nationally traded, 2X leveraged …

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How Does Volatility Shares -1X SVIX Work

This post will discuss how SVIX works, including how it trades, how its value is established, what it tracks, tax treatment, termination risk, likely liquidity, and performance simulations.  Volatility Shares’ new -1x Short VIX Futures ETF (ticker: SVIX) started trading Wednesday, March 30th. After a gap of four years, volatility traders have access to a -1X leveraged short-term volatility Exchange Traded Fund (ETF).  SVIX’s Prospectus …

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Why We Need the LONGVOL & SHORTVOL Indexes

This post discusses how the LONGVOL and SHORTVOL indexes work, but starts with some historical background that illuminates why these new indexes were needed.   Two new leveraged volatility Exchange Traded Funds from Volatility Shares, -1X SVIX and 2X UVIX started trading on the 30th of March, 2022. SVIX and UVIX will utilize two new Cboe indexes, the Short VIX Futures Index (ticker: SHORTVOL) and …

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Deciding What to do Next

Years ago I had a meeting with my manager regarding three projects that I was responsible for. Each of the projects had considerable technical problems, tight deadlines, and were short on resources. In the course of the conversation, I asked my boss what his priorities were on the projects. He said all three projects had number one priority. Aargh… Absent useful guidance from others, how …

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