Renewed Trump tariff threats hit markets hard on Oct. 10, 2025. Defensive plays like BTAL, HDGE, CTA, and KMLM outperformed S&P 500 last week as investors sought safety amid rising volatility.
Volatility is currently very cheap, making VXX attractive as a tactical long position rather than a buy-and-hold investment. Seasonality trends and unresolved tariff uncertainties could quickly increase market volatility, supporting a bullish stance on VXX now. VXX offers effective short-term portfolio hedging, especially when volatility is low and macro risks remain unresolved.
I upgrade VXX from sell to hold, reflecting a balance of macro risks and recent volatility trends. Trade war fears, inflation volatility, and rising oil prices are key factors keeping volatility elevated this summer. Technical analysis shows VXX support near $40 and resistance at $60, suggesting a range-bound outlook through summer.
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The ETN provides a unique financial product designed for investors looking to gain exposure to volatility. It is structured around futures contracts on the VIX index, which is known as the CBOE Volatility Index®. The VIX index itself measures the market's expectation of 30-day volatility based on options prices of the S&P 500 index. It's important to note that the ETN doesn't offer direct exposure to the VIX index or its spot level. Instead, it focuses on futures contracts of specified maturities related to the VIX, aiming to track the performance of these contracts.
This product offers investors a pathway to gain exposure to the futures market of the VIX index without having to directly engage in the complexities of futures trading. Through the purchase of the ETN, investors can potentially benefit from the movements in the prices of VIX futures contracts of specific maturities. This might be particularly appealing during periods of heightened market volatility when the VIX index tends to rise.
The ETN is designed to provide exposure to one or more maturities of futures contracts on the VIX. This enables investors to have a more targeted approach in their investment strategy regarding volatility. By focusing on specific maturities, investors can tailor their exposure based on their volatility outlook and investment horizon, whether they are looking for short-term opportunities or have a longer-term view on market volatility.