ProShares Short VIX Short-Term Futures ETF (SVXY)
BATS BATS Primary 
SVXY: Tactical Tool To Take Advantage Of A Falling VIX
SVXY is a high-risk ETF designed to deliver -0.5x the daily performance of the S&P 500 VIX Short-Term Futures Index. Current low market volatility makes it an inopportune time to bet on further volatility declines, so I rate SVXY as a Hold. Understanding when to go long or short volatility is crucial, especially in markets with overvalued stocks and sentiment-driven pricing.
SVXY: Taking Profit Amid Growing Prospects Of Another VIX Spike
The ProShares Short VIX Short-Term Futures ETF has performed well, since we upgraded our rating from "Hold" to "Strong Buy" on 9 April. The SVXY has gained by around 11.9% while the Cboe Volatility Index has dropped by around -30.0% over the same period (based on prices at the time of publication). Given the increasing risks of a highly volatile equity environment, we think the potential reward for shorting volatility no longer adequately compensates for the risk of another spike on the VIX.
SVXY: Volatility Got Crushed After The Election Results (Rating Downgrade)
ProShares Short VIX Short-Term Futures ETF benefits from falling volatility; post-election VIX normalization makes it less attractive, prompting a 'Sell' rating to take profit. SVXY is not suitable for buy and hold due to potential significant drawdowns from sudden volatility spikes. The fund should be bought when VIX spikes due to external events and sold after volatility subsides.
SVXY: Buy Volatility After A -40% Drawdown
SVXY experienced a -40% drawdown following a spike in the VIX on August 5, 2024. The ETF aims to provide a -0.5x return against the S&P 500 VIX Short-Term Futures Index. SVXY performs well in calm markets and normal bear markets, but experiences losses during sudden spikes in volatility.
Why Chasing Volatility With a VIX ETF Is Trickier Than It Seems
U.S. investors looking for positive returns had few options on Monday. Stocks tumbled while Treasury bond prices pared early gains.
