For investors seeking momentum, iPath Series B S&P 500 VIX Short-Term Futures ETN VXX is probably on the radar. The fund just hit a 52-week high and is up 128.09%% from its 52-week low price of $39.98/share.
VXX matches Nasdaq 100 volatility better than SQQQ, making it a superior hedge for tech growth exposures during volatile market conditions. VXN, the CBOE NASDAQ-100 Volatility Index, is a key measure of near-term tech sector volatility, and VXX closely follows its pattern. Growth scare may continue in 2025, at least for the 1st half. Hedge tech growth exposures are recommended to have certain sustainable hedge alternatives like VXX.
iPath® Series B S&P 500® VIX Short-Term Futures™ ETN from Barclays is up 26% since mid-February but is not a buy-and-hold; it's for hedging and speculation. VXX's gains are driven by front-month VIX futures, which spike during market volatility but historically revert, leading to potential losses. Significant put buying signals an interim market bottom, suggesting VXX will likely lose its recent gains as volatility normalizes.
Asset Management Industry | Financial Services Sector | - CEO | BATS Exchange | 06748M196 Cusip |
US Country | - Employees | - Last Dividend | 24 Jul 2024 Last Split | - IPO Date |
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.