Tag Archives | VXX

Caution on VIX ETNs

Although useful as hedging tools, the exchange traded notes that track market volatility, the VIX, can potentially burn individual investors. That’s the conclusion drawn by the WSJ’s Brendan Conway in the article Caveat Buyer: ETNs Tied to VIX.  Conway highlights the use of the S&P 500 VIX Short Term Futures ETN (VXX) by Forward Management, […]

Playing Volatility with ETFs

The WSJ’s Weekend Investor column took a look at Playing the Market Plunge after last week’s wild market swings. One example–in Thursday’s volatile trading, the Vanguard Industrials ETF (VIS) fell from the $50s to $0 at one point in the afternoon before returning to normal levels. However, the article points out that high volatility can create […]

Another Look at the Risks and Benefits of ETNs

WSJ editor Karen Damato recently took another look at ETNs after last year’s credit crisis highlighted the risks of investing with exchange traded notes. The key difference between investing in ETFs and ETNs is whether you want to own a portfolio or own a promise.  However, although ETNs expose investors to credit risk, they do […]

Exchange Traded Notes – Taxes, Access and Risk

Forbes‘ Scott Woolley writes that investors who like ETNs for their favorable tax treatment and access to unusual asset classes should also consider their unique risks. In the article The Trouble with ETNs, Woolley dubs the unique risk as the Lehman effect. Turns out that before the firm went bankrupt, Lehman introduced an exchange traded […]

Investing in Fear (VXX, VXZ)

Two new ETNs that offer exposure to volatility could provide an interesting tool for asset allocators who want insurance against a sudden market crash. In the article Volatility indexes offer hedge for investors, Fortune reporter Yuval Rosenberg writes that the iPath S&P 500 VIX Short-Term Futures ETN (NYSE: VXX) and iPath S&P 500 VIX Mid-Term […]

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. […]

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