- The public knows the CBOE Volatility Index (VIX) as the "Fear Index", since it rises when stock prices fall.
- The opposite is the ProShares Short VIX Short-Term Futures ETF (SVXY), an inverse exchange traded fund that rises when stock prices rise – by multiples of the stocks' gains.
- Other VIX-related ETFs are NOT structured as inverse to VIX Futures, so they decay in value as time passes.
- Investors might like the VIX index to be a warning forecaster of coming stock price trouble, but it has no reliable evidence of doing so.
- Market-maker hedging in options of the VIX Index tells their best guesses of what may be coming for the VIX, but they are far more productive hedging the SVXY.