The "vol tourists" are piling into the Inverse VIX Short-Term ETN (XIV), says Chris Cole, not...

The "vol tourists" are piling into the Inverse VIX Short-Term ETN (XIV), says Chris Cole, not really understanding it, but liking the price action (up) and believing the "Fed will always have their back." The "tourists" may get burned at some point, but for the moment, the XIV is providing another way for those betting on turbulence to lose money - demand to borrow the shares is soaring.

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Comments (9)
  • DeepValueLover
    , contributor
    Comments (11388) | Send Message
    Riding vol down now is like getting into real estate in 2005.
    28 Mar 2013, 01:44 PM Reply Like
    , contributor
    Comments (217) | Send Message
    all the juice is gone out of xiv...i remember it with a 4 handle...
    28 Mar 2013, 01:54 PM Reply Like
  • The Sociology of Finance
    , contributor
    Comments (955) | Send Message
    There's no juice now with VIX at about 13, but there will be some eventually. Until then, I'll sell deep OTM puts on SVXY to get back in when vol comes back.
    28 Mar 2013, 02:33 PM Reply Like
  • Dan Mikulskis
    , contributor
    Comments (8) | Send Message
    haha - I like the expression "vol tourists", very apt.


    Overall central bank action has contributed to the low level of the VIX, for sure. but I can easily see a 10-15% equity correction coupled with a 15+ vol spike in the VIX even within this environment of central bank easing - central banks mandates aren't directly related to equity markets or vol markets.
    28 Mar 2013, 02:42 PM Reply Like
  • Jeff Hartzer
    , contributor
    Comments (6) | Send Message
    VXX=Ice Cream in the freezer. But my old long term ice cream has melted and frozen over hard too many times...May not reach my purchase price until the next asteroid hits. Ditto #FAZ.
    28 Mar 2013, 02:42 PM Reply Like
    , contributor
    Comments (25) | Send Message
    UVXY should be shoot up ery soon.
    28 Mar 2013, 02:42 PM Reply Like
  • bjk413
    , contributor
    Comments (14) | Send Message
    maybe i don't understand, but this comment confused me. If everyone is buying the XIV why is borrow demand soaring?
    28 Mar 2013, 02:50 PM Reply Like
  • tobaccorogue
    , contributor
    Comments (140) | Send Message
    Banksters are willing to rob anyone, even our children to kick this misery down the road. So far they are succeeding. And they are luring mom and pop into a dastardly scenario with artificial interest rates. When this ends disastrously Chairman Mau-nake, Obama, and the Euro Banksters should all be swinging on a rope.
    28 Mar 2013, 03:23 PM Reply Like
  • Joe2922
    , contributor
    Comments (519) | Send Message
    Buy VIX at all time highs?
    Where the stock market goes next in 2013:
    Comments welcomed.
    28 Mar 2013, 07:17 PM Reply Like
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