Great news traders! Volatility tickers UVXY and VXX are now available for autotrading in Option Alpha. We are always looking to add new ticker symbols based on your feedback and appreciate all your suggestions.
UVXY and VXX are two of the most popular volatility products. You can see the new tickers and their details in the Screener, as well as the complete list of stocks and ETFs available for autotrading.
What is UVXY?
UVXY (ProShares Ultra VIX Short-Term Futures ETF) “seeks daily investment results that correspond to the daily performance of the S&P 500 VIX Short-Term Futures Index.” UVXY is a leveraged product that “seeks a return that is 1.5x the return of its underlying benchmark (target) for a single day.” Therefore, it is not uncommon to see more volatility in UVXY than VXX.
What is VXX?
VXX (iPath® Series B S&P 500® VIX Short-Term Futures™ ETN) provides traders with exposure to the S&P 500 VIX Short-Term Futures™ Index.
VXX is “designed to provide access to equity market volatility through CBOE Volatility Index® (the "VIX Index") futures. The Index offers exposure to a daily rolling long position in the first and second-month VIX futures contracts."
Benefits of Trading UVXY & VXX
UVXY and VXX offer an opportunity to profit from short-term volatility changes. As mentioned above, these securities track volatility, so when volatility rises or falls quickly, traders can capitalize on those changes using these instruments. The ticker’s prices typically increase with S&P 500 volatility, as measured by the price of VIX futures contracts.
UVXY and VXX track short-term futures contracts, so they are intended for shorter time frames. Volatility products can be used to speculate on short-term movements in the market or they can be used as part of an options trading strategy. Historically, the VIX Short-Term Futures Index is negatively correlated to S&P 500 returns, which can help hedge portfolio risk.
Note that UVXY and VXX DO NOT track the performance of the VIX index and will have different performance characteristics.