Can Volatility ETFs & VIX Futures Blow-up the Stock Market?

The VIX Futures market has been on a bit of a tear—driven by inflows into volatility ETFs like Barclays’ VXX, VelocityShares’ XIV and TVIX, and ProShares’ UVXY.   The chart below shows the resultant growth in the short term futures open interest and volume. The data doesn’t look as dramatic if we change the vertical axis to a logarithmic scale—a scale that makes it easier to …

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The Double Dip is Dead, but What About Volatility

March 9th marked the 3 year anniversary of the current bull market.  The S&P 500 has scored an impressive 110% run-up, and I think we can officially declare that the dreaded double dip recession didn’t happen. However for the buy and hold investor there isn’t a lot to celebrate.  We are still 16% below the S&P 500’s 2007 peak.  Not including dividends a January 1, …

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VXX prospectus

You can find Barclays’ VXX prospectus here.  The prospectus covers both the short term VXX, and the medium term VXZ. This post discusses going long on VXX. This post discusses some choices if you think VXX is going to go down. For an estimated date for VXX’s next reverse split see this post. For an overview of how VXX works, see “How Does VXX Work?” …

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