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What are the best VIX ETFs & ETNs to trade volatility?

Below you can find an overview of the most popular and most liquid ETFs (Exchange Traded Funds) and ETNs (Exchange Traded Notes) for trading volatility with the VIX Index.

These securities have stock-like characteristics, so you can buy the VIX like a stock; although there are some drawbacks (see warnings & tips below).

Warning & Tips for trading VIX ETFs & ETNs

Be warned that VIX ETFs and ETNs actually track VIX futures indexes, which creates two big cons:

  1. They perform very differently from the VIX Index
    VIX futures indexes—and therefore VIX ETFs & ETNs—do a lousy job emulating the VIX index. Over a period of a month or more, the return pattern will differ radically from that of the VIX index.
  2. The tend to lose money in the long run
    Because of the nature of the VIX futures markets, the rolling cost of futures is detrimental to performance results. 

Trading Tips to avoid these cons

  • Use VIX ETFs and ETNs only for short-term trading, e.g., for intraday trading or for only a few trading days. Never invest in these instruments over the long term in a buy-and-hold portfolio.
  • Prefer VIX ETFs or ETNs based on “Short-term Futures” because they offer better 1-day sensitivity to the VIX index then “mid-term” based VIX ETFs.

Popular & most liquid VIX ETFs & ETNs

Long VIX Unleveraged

  • VXX = iPath S&P 500 VIX Short-Term Futures ETN (previous ticker = VXXB)
    The VXX Notes tracks the S&P 500 VIX Short-Term Futures Index Total Return, which provides exposure to a daily rolling long position in the first and second month VIX futures contracts.
  • VXZ = iPath S&P 500 VIX Mid-Term Futures ETN (previous ticker = VXZB)
    These Notes tracks the S&P 500 VIX Mid-Term Futures Index Total Return, which provides exposure to a daily rolling long position in the fourth-, fifth-, sixth-, and seventh-month VIX futures contracts.
  • VIXY = ProShares VIX Short-Term Futures ETF
    This fund tracks the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.
  • VIXM = ProShares VIX Mid-Term Futures ETF
    This fund tracks the S&P 500 VIX Mid-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts having a weighted average of five months to expiration.
  • VIIX = VelocityShares VIX Short-Term ETN
    These Notes seek returns that are 1x the returns of the S&P 500 VIX Short-Term Futures Index ER for a single day.

Long VIX Leveraged

  • UVXY = ProShares Ultra VIX Short-Term Futures ETF
    This leveraged fund seeks a return that is 1.5x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next.
  • TVIX = VelocityShares Daily 2x VIX Short-Term ETN
    This leveraged note seek a return that is 2x the return of the S&P 500 VIX Short-Term Futures Index ER for a single day.

Short VIX (Inverse ETFs, Unleveraged)

  • SVXY = ProShares Short VIX Short-Term Futures ETF
    This short fund seeks a return that is -0.5x the return of its underlying benchmark (target) for a single day, as measured from one NAV calculation to the next.
  • ZIV = VelocityShares Inverse VIX Medium-Term ETN
    These Notes seek returns that are -1x the returns of the S&P 500 VIX Mid-Term Futures Index ER for a single day.

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