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Trading > Larry Connors on Short Term Trading

Introducing the Exchange-Traded VIX

Larry Connors | Mon, 01/26/2009 - 12:55pm | Barclay's, ETF trading, Larry Connors, Trading ETFs, VIX, Volatility Index |  5 comments

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Very good news for us.

Barclays has filed to trade ETNs on the VIX. This is great news for all of us. I’ve been researching (and publishing information) on the VIX since 1995 and our database of research is very deep. This should allow us to gain some immediate traction in the market once this product becomes public.

A few notes on the article I’ve linked to below.

1. These are ETNs, not ETFs. This means that there is no physical asset involved. Should Barclays become nationalized, their ETNs would be at risk as the owners of the ETNs own notes (as a creditor you stand in line).

2. This article is a bit incorrect. As I understand it, the ETNs will be traded off the VIX futures, not the VIX index. There’s a big difference. The VIX futures often reflect the fact that volatility reverts to its mean which means the swings are usually smaller than the actual VIX. But, in my opinion, healthy edges still exist as various times and we’ll likely be trading this vehicle once it goes public.

I’ll keep you updated on this and you can look forward to me adding this vehicle to the Battle Plan once it goes public.

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