Next Estimated VXX Reverse Split—August 11th, 2020

I’m estimating Barclays will reverse split VXX for the 6th time on August 11, 2020, based on the recent decay rates of around 10% per month (when the market is not correcting).  If the market stays quiet then VXX could reverse split as early as March 2020 but I’m expecting a few volatility bumps along the way.  For a security doomed to decrease in value …

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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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VXX Options—Similarities and Differences with VIX Options

VXX options offer ways to take either long or short volatility positions.  Unlike most securities VXX tends to go up when the market is down—which leads to some signficantly different options characteristics. Comparing VXX options to VIX options: Similarities: Both are based on S&P 500 volatility futures Will show a strong reversion to baseline behavior when the market is behaving itself—the VIX index and VXX …

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Going short on VIX?

Unlike the S&P 500 or Dow Jones Index, there is no way to directly invest in the VIX index.  I’m sure some really smart people have tried to figure out how to go long or short on this computed volatility index, but there’s just no way to do it directly.  Instead, you have to invest in a security that attempts to track VIX.  None of …

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