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The failure of VIX ETNs to track their benchmarks threatens to kill investor interest in...

Monday, December 3, 2012, 5:09 PM ET
The failure of VIX ETNs to track their benchmarks threatens to kill investor interest in the products - not good for CBOE Holdings (CBOE), says Well's Chris Harris. The exchange has benefited from a surge in VIX futures trading - up 233% Y/Y (!) - setting it up for disappointment if the retail investor moves on to something else.

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This news story has 2 comments:

rgaetanopa Comments (3)

They do exactly what they are intended to do...a bit of slippage because of trading spreads I assume, but the decay issues are no different hat if you tried to trade the futures directly. Take a look at what append to VXX during the Budget Ceiling Failure, there was a nice roll yield because of backwardatioin. But retail investors think this is a free lunch, just hold until volatility spikes, insurance cost money, you have to pay to play.

3 Dec 2012, 05:56 PM Reply Like

Laurent1962 Comments (65)

Yes, "insurance cost" money", but this Insurance may be a bit expensive .....

4 Dec 2012, 03:41 AM Reply Like

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