Vixxy Vixxy (VXX)

JCVD biting Snake

Volatility is waiting to bite your head off.

Besides the usual high volume stocks such as Bank of America (BAC) and Nokia (NOK) is the Path S&P 500 VIX ST Futures ETN (VXX) making the list.

The VXX is already at 15M shares before noon.  We have all but forgotten about volatility in the face of the Dow Jones hitting 15K.  Stocks can do no wrong and we all need to embrace long positions and not miss out on the gains.  Blah, blah, blah.  Meanwhile the VXX is getting all kinds of attention today behind the scene.  Note that the VXX is less than 2% from its 12 month low, trading today down a smig at $18.38 a share.

Of course the market is charging ahead however the VIX has been dropping while the futures curve has been unfavorable as well.  Turns out the VIX futures market currently trades in a condition known as "contango" a situation where contracts further along the futures curve are more expensive than front month contracts. 

Fellow Masters, trading the VXX is dangerous but it might be worth a 1 to 2% consideration to hedge any craziness that could hit the market.