logo
  Join        Login             Stock Quote

VXX And VXZ Celebrate Fourth Birthday

 January 31, 2013 02:48 PM


What better way to celebrate your birthday than by ripping off a huge gain. That's what VXX must have been thinking today as it gained 6.2%, while it's often overlooked sibling, VXZ, gained 2.2%.

Of course, the last four years have not been kind to these VIX exchange-traded products in the aggregate, but for selected periods, they have been remarkable performers. Just ask anyone who was short VXX when it spiked 198% during a period from July to October of 2011.

In spite of that impressive short-term performance, both VXX and VXZ have lost ground in each of the four years since their launch. To be fair, though, so did the VIX, if one measures each ‘performance year' from January 30th.

[Related -Seven Top Stocks With Fresh Dividend Growth Or Share Buybacks]

The table below shows the performance of VXX, VXZ, the VIX and SPY during each of those January 30 performance years. When one considers that in each of those yearly measurement periods the SPY advanced and the VIX declined, it is a little bit easier to swallow the performance of the two pioneering VIX ETPs.

In spite of some of the concerns expressed about the performance of VXX and VXZ in this space as early as the first half of 2009, VXX is still the #1 VIX ETP in terms of assets at $1.043 billion, while VXZ is in the #8 slot at $57 million.

[Related -The Chip Maker Short Sellers Should Be Watching]

To reiterate what I have maintained since their launch, VXX and VXZ are products that are suitable for short-term long volatility positions or for longer-term holding periods under certain market conditions. For those who are interested in more information, the links below should provide some excellent jumping off points.

All investors are encouraged to carefully study the prospectus of VXX and VXZ and more generally of all VIX and volatility-based exchange-traded products and to spend some time learning the intricacies of VIX futures, contango, roll yield and other related subjects.

Disclosure(s): short VXX at time of writing

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageThe Chip Maker Short Sellers Should Be Watching

Investing in semiconductor stocks is always tricky. Industry cycles can lead to bumps in the road for the read on...

article imageChicago Fed: US Economic Growth Slowed In October

The pace of US growth slowed more than expected in October, according to this morning’s update of the read on...

article imageHoliday Fever Takes Hold Of Stock Investors, But A Pullback Is Needed

With warmer weather arriving to melt the early snowfall across much of the country, investors seem to be read on...

article imageIs 0% Growth For 90% A Successful Economic Model?

Via Greg Mankiw I read the review of Piketty's book by Deirdre McCloskey. The review reminds me of the read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.