ProShares VIX Short-Term Futures ETF (VIXY)
VIXY Can Be An Appealing Market Hedge
ProShares VIX Short-Term Futures ETF offers short-term exposure to S&P 500 volatility, acting as a hedge during sharp market declines, but is not suitable for long-term holding. Due to futures roll costs and long-term market growth, VIXY tends to decay in value over time, making it best for tactical, short-term trades. Risks include value erosion, unpredictable volatility spikes, and complex tax implications, so careful timing and position management are essential.
VIXY: The Fear Has Subsided (Rating Upgrade)
VIXY has dropped 32% since our 'Strong Sell' call; the trade thesis has played out as volatility normalized. With VIX back under 20 and the futures curve in contango, further downside in VIXY is limited, so we move to a 'Hold' rating. VIXY is strictly a short-term trading instrument, not suitable for buy-and-hold due to persistent value erosion over time.
VIXY: Today's Volatility Levels Are Not Sustainable
Investors often panic during volatile markets, leading to poor decisions; current market volatility is historic, comparable to Covid and the Great Financial Crisis. The S&P VIX Index index measures market volatility; current high levels are unsustainable long-term as continuous put buying is unrealistic. ProShares VIX Short-Term Futures ETF tracks short-term VIX futures; it gains during market upheaval but suffers massive losses over time due to the roll effect.
VIXY: Not A Portfolio Hedge, Just A Day Trading Tool
VIXY is not a suitable long-term portfolio hedging tool due to negative roll effect in VIX futures, down -85% in 3 years. VIXY is only profitable in rare events, up 9.9% for the year despite a 55% gain after the August 5, 2024 VIX spike. Alternatives for portfolio hedging include buying Treasuries and market neutral funds like BTAL, which have shown better performances.
VIXY: History Says Now Is The Time To Own Volatility
The US economy shows soft business conditions, lingering inflation, and concerning household debt. The S&P 500 continues to reach all-time highs while the volatility index remains low. Owning VIXY in small amounts as a hedge to the S&P 500 and timing it properly can be beneficial.
VIXY: Complacent Markets Warrant A Hedge
The Federal Reserve's pivot towards a 'soft landing' and potential rate cuts in 2024 has boosted asset prices and hurt hedges like VIXY. Downside risks are now higher as investors have become too complacent, expecting 7 consecutive rate cuts beginning in March. Middle East tensions could reignite inflation worries, causing the Fed to hold rates higher for longer.
VIXY: Like A Put Option, Without Using Options
Volatility is a constant presence in the markets, causing concern when high and uncertainty when low. The VIX, a measure of market volatility, cannot be directly invested in and has a high tracking error. With the VIX approaching lows, it may be a good time to consider a short-term position in VIXY.
VIXY: May Be Useful As A Short-Term Hedge Against War
The escalating war between Israel and Hamas/Gaza could lead to a regional conflict involving powers like Iran and Syria. The ProShares VIX Short-Term Futures ETF can potentially hedge this risk and reduce portfolio drawdowns. While the VIXY ETF has historically suffered from contango decay, it can generate exceptional returns during periods of stress and be used as a short-term hedge.
VIXY Vs. VIXM: A Look At Which Is Better For A Bear Market
Volatility is near decade lows as markets have embraced the soft landing narrative. Investors can speculate on a rising VIX through VIXY and VIXM. We look at why they are performing so differently and which would be better for a bear market should we get one.
VIX ETFs Surge As Job Numbers Send Interest Rates Climbing
Volatility, as measured by the CBOE VIX, surged more than 7% on Thursday, amid stocks, index futures, and stock ETFs retracing some of their recent gains due to strong jobs data. It sent interest rates rocketing.
Best and Worst ETF of Second Quarter From Different Zones
The U.S. stock market ended the second quarter of 2023 on a high note, with major indexes recording significant gains despite mounting recession fears and a tight central bank policy.
Top and Flop ETFs of the First Half of 2023
Wall Street has rebounded strongly in the first half of 2023, setting the stage for big gains.
VIXY: Time To Pounce On The VIX
The S&P 500 Index rallied after the US government suspended its $31.4 trillion debt ceiling, leading to market calm and a drop in the CBOE Volatility Index. The sustained rally in the S&P 500 is justified due to downward inflation trends and improving market sentiment. Investors may benefit from a long-biased VIX trading strategy to provide uncorrelated returns to equity-heavy portfolios.
VIXY: Buy Insurance Before The House Catches Fire
Enough leading indicators strongly suggest that a recession is either here already or will arrive in the next few months. However, the stock market remains in "Hakuna Matata" mode, as the VIX sits very close to post-pandemic lows.
VIXY: Huge Bets Have Been Placed On The VIX, But We Are Sticking To Our Entry Target
Recent transactions in the options market for the VIX are beginning to draw the attention of the financial media, and some traders are contemplating whether it is time to make a move. Given that the VIX is currently still at 18 points, we don't see a compelling case to establish a bullish position on the ProShares VIX Short-Term Futures ETF yet.
VIXY And SVXY: Exploring Strategies To Profit From Fear
We discuss the mechanics behind the VIX and its historical behaviour, before exploring simple strategies to trade the VIXY and SVXY. The VIXY and SVXY are effective tools to trade the VIX only in the short term but are destined to become losing trades the longer one extends the holding period.
Consumer Discretionary & Volatiity: 2 ETFs to Watch for Outsized Volume
RCD and VIXY saw massive trading volumes in yesterday session.
Avoid VIXY Unless There Is Reasonable Expectation Of Catastrophic Risk
VIXY is definitely not a long term investment. Since its January 2011 inception, it has experienced an average, annual loss of 50% a year. VIXY has short term use if one believes they can either time the start of a sudden market decline or want to temporarily hedge a portfolio against catastrophic events.
Volatility ETFs Climb as Traders Hedge Risk Ahead of Fed's Jackson Hole Conference
The CBOE Volatility Index, or VIX, and volatility-related exchange traded funds jumped Monday as another round of aggressive interest rate hike speculation stoked fears of a potential economic recession ahead. Among the best performing non-leveraged ETFs of Monday, the ProShares VIX Short-Term Futures ETF (VIXY) rose 5.0%.
Volatility ETFs Aren't Flashing Signs of Market Fear
While observers have been warning of an imminent economic recession that could drag down the markets, the CBOE Volatility Index, or VIX, and related exchange traded funds remain relative lax, reflecting ongoing complacency in equities. Year-to-date, the iPath Series B S&P 500 VIX Short Term Futures ETN (VXX) increased 18.