About $580M pulled out of the largest VIX ETF (VXX) since the market began heading down in late...

About $580M pulled out of the largest VIX ETF (VXX) since the market began heading down in late March gives strength to the idea the fund is less about speculation, more about hedging. "If history is any guide, a spike in VIX would result in significant redemptions of VIX products," said Barclays' Maneesh Deshpande back in April. Correct.

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Comments (4)
  • jvelez12
    , contributor
    Comments (83) | Send Message
    what does redemption of VIX products mean? Is that selling positions or exercising options?
    5 Jun 2012, 04:47 PM Reply Like
  • mikeinnyc
    , contributor
    Comments (65) | Send Message
    I will argue the other side. "The fund is less about speculation, more about hedging." If hedging was used utilizing the VIXX then equities should of been sold in nominal dollars ratios for confirmation of the $580M pulled out. Statement is true but only one side.


    Now for the Jamie Diamond response: Yes, absolutely it's for hedging. We need more hedging products like the VXX who's contango wiped out lazy Muppets investors. If the Muppets only understood the Contango DANCE...... Dance until you pass out and slam your head on the floor; they would just say NO and Go like Crack. But hey, then again what investor takes responsibility for his own stupid actions? When People finally take full responsibility I think I can say my life is complete but until then I will watch the Flies get Zapped into the Blue Light of the VXX. No matter how many Mosquitoes die they just keep coming back! Yeah isn't that funny?


    Yesterday P/C Ratio at .31 was last seen AUG 08, 2011 at or near the bottom of SPX. Here we are again.


    This time it's different.......No Money, No Jobs, Obama, and my Wife took my money. :)


    Happy Trading.
    5 Jun 2012, 05:36 PM Reply Like
  • dbakerpa
    , contributor
    Comments (16) | Send Message
    Mike it sounds like your comment are derogatory for those invested in the VIX. Regardless your on base but not even you can truly understand the principles behind volatility and risk variance. If you can write a book. By all measure the VXX is oversold. It easily has the capacity to go back to 30 or so but will never reach the previous highs simply because of the principles you mention. Long term degradation in ETFs is a trap.
    I am long VXX but in at 16 and sold calls to the suckers who were buying on the spike.
    13 Jun 2012, 12:58 PM Reply Like
  • sean.parmelee
    , contributor
    Comments (791) | Send Message
    If QE3 is announced, get ready for a world of hurt on your VXX position.
    12 Sep 2012, 10:12 AM Reply Like
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