How Does VXX/VXXB Work?

This post will discuss what VXX is ( full name: Barclays Bank PLC iPath S&P 500 VIX Short-Term Futures ETN), how it trades, how its value is established, what it tracks, and how Barclays makes money running it.  VXX has been through some transitions recently.  The original security matured in January 2019 and was replaced by VXXB, which was very similar except for a few …

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Barclays’ VXXB—Not as Short Term as You Think

In terms of assets Barclays’ “S&P 500 VIX Short-Term Futures” ETN is among the leaders in volatility ETFs with around 500 million dollars under management.   I suspect it’s also one of the leaders in investor confusion. Although VIX is in its formal name VXXB doesn’t actually track the CBOE’s VIX index with any degree of precision. In fact, it’s not unusual for VXXB and VIX to …

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How to short VXXB—the hard way and the easy way

Easy way: If you want to short VXXB the simplest way is to buy SVXY.  This Exchange Traded Funds tracks -0.5X  the daily percentage moves of VXX so it isn’t a true short, but it has the same goal—going up when VXX goes down.  They carry annual investment fees (SVXY’s is 0.95%), which I doubt is an issue for you if you’re thinking of shorting …

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How to go long on the VIX index

Unlike the S&P 500 or Dow Jones Industrial Index, there’s no way to directly invest in the CBOE’s VIX® index.  Some really smart people have tried to figure out a way, but there’s just no way to do it directly with something like a VIX index fund.  Instead, you have to invest in a security that attempts to track VIX.  None of them do a great …

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