It’s been an absolute blood bath.
Over the last few weeks, the Dow Jones Industrials fell 10,000 points. The S&P 500 gave up 1,1100, as the NASDAQ dropped nearly 2,900 points.
All on coronavirus fear.
For those of you that jumped on our volatility trades – VXX, UVXY, and TVIX – you did very well.
However, it also appears the fear is overdone in the markets. While other investors are still running scared from the markets, some are now beginning to trade downside of volatility. That’s because, at 85, the Volatility Index (VIX) is at unsustainable all-time highs.
There are a few ways to trade that potential move.
Opportunity No. 1 – ProShares Short VIX Short-Term Futures ETF (SVXY)
ProShares Short VIX Short-Term Futures ETF provides short exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration, according to Pro Shares.
Opportunity No. 2 – VelocityShares Daily Inverse VIX Medium-Term (ZIV)
The ETN seeks returns that are -1x the returns of the S&P 500 VIX Mid-Term Futures Index ER for a single day, says Velocity Shares.
Opportunity No. 3 – iPath Barclays Inverse S&P 500 VIX Short-Term Futures ETN (XXV)
The Index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects market participants’ views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the Index.