2x Long VIX Futures ETF is a risky, short-term trading vehicle that decays over time due to contango and leverage-induced negative compounding. Geopolitical events like the Israel-Iran conflict can cause short-term spikes in UVIX, but these gains typically fade quickly. Given the short-lived nature of volatility spikes and its design, I rate UVIX a Sell and advise against chasing recent gains.
Volatility ETFs are on the rise as Trump's renewed tariff threats sent the VIX fear gauge soaring 29.3% last week.
Volatility has soared to the highest level since August. Investors can benefit from this trend with ETF/ETN options available in the market.
The UVIX ETF offers 200% exposure to short-term VIX futures and can deliver spectacular short-term gains during market stress. However, over the long run, the UVIX has had abysmal performance and is a good short candidate due to its perpetual decay. So far, markets have declined due to Trump's tariffs, but I believe it's not yet time to short volatility as earnings expectations remain high.
Volatility roars back amid trade war fears and a slowing U.S. economy. Investors could benefit from this trend with ETF/ETN options available in the market.
The VIX spiked to its third-highest level in August 2024 due to widening bid-offer spreads, reflecting investor fears amid geopolitical and economic volatility. Despite a post-election drop, the VIX remains in the buy zone, with historical patterns suggesting potential rebounds above the 20 level. Rising long-term interest rates and geopolitical tensions could trigger stock market corrections, pushing the VIX higher as investors seek price insurance.
Volatility roared back amid market rotation and growing anxiety about a slowing U.S. economy. Investors could benefit from the rising market volatility with ETF/ETN options available in the market.