Fear’s New Friend – VIX ETNs

Two new Exchange Traded Notes or ETNs are coming to market that will make buying volatility indexes and derivatives as easy as buying a share of stock.

According to SmartMoney‘s Jonathan Hoenig in the article Trillionaire on a Dime, Barclays expects to launch the iPath S&P 500 VIX ETNs at the end of the month. The ETNs will track the implied volatility of the S&P 500 at two different points on the volatility curve and enable investors to take a long or short position.

The volatility index or VIX tends to rise when stocks drop. ETNs are unsecured promissory notes backed by the credit of the underlying issuer – in this case, Barclays.

For a complete listing, see the iPath ETN Directory.

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