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

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.
Comments (2)
  • 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
  • Yes, "insurance cost" money", but this Insurance may be a bit expensive .....
    4 Dec 2012, 03:41 AM Reply Like
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