Bet on Volatility vs. Decline: Long the VXX

This week ETFProdigy.com takes on the iPath S&P 500 VIX Short Term Futures ETN (NYSE:VXX) which provides exposure to equity market volatility through CBOE "Volatility Index" futures. 

Investors are busy trying to figure out where the market is headed and taking positions both long and short, while the underlying fear is we are headed for a correction, the VXX makes perfect sense.

(ETFProdigy.com) A direct investment in VIX (commonly referred to as spot VIX) is not possible. The S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) holds VIX futures contracts, which could involve roll costs and exhibit different risk and return characteristics.

Investments offering volatility exposure can have various uses within a portfolio including hedging, directional, or arbitrage strategies and are typically short or medium-term in nature.

The VXX is trading near its 52-week low, Friday it closed at $22.37 and over the past 12 months ranged from $21.78 to $118.99 (see chart below).

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SOURCE: http://etfprodigy.com/VXX-VOLATILITY-03182010

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