Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:>ChinaETFsEarningsEconomy>EnergyForex>GoldIncome>Lessons>IdeasTrading

  • Other news: News from PR Newswire
| More

Euro Zone VSTOXX ETNs Land on U.S. Beaches!

Mon, Oct 30, 8:21 AM ET, by Bill Luby

Think the market is too complacent about this weekend's election in France?  Worried that the euro area is going to crumble under the weight of Italy's struggles?  Convinced that Greece, Portugal or Spain are just one more kicked can away from a disaster?

As of tomorrow, investors in the U.S. will have another way to translate these ideas into actionable trades with tomorrow's launch of two new exchange-traded notes (ETNs) - EVIX (long euro zone volatility) and EXIV (inverse euro zone volatility) - from VelocityShares and UBS that put a European face on existing U.S. VIX-based products such as VIIX and perennial favorite XIV.

Based on the VSTOXX, the VIX-like volatility index for the EURO STOXX 50 Indexof 50 blue-chip stocks from 11 euro zone countries, EVIX and EXIV should be familiar to those who are knowledgeable about VXX and VIIX on the long volatility side as well as XIV and SVXY on the short volatility side.  EVIX and EXIV are based on VSTOXX futures and have a target maturity of 30 days - a maturity that is maintained by rolling a portion of the portfolio each day and therefore subjecting both products to the vagaries of contango and backwardation.  In the event these are terms you are not familiar with, I strongly recommend that you click on the links above and educate yourself.  Believe it or not, this is the ninth year I have been talking about the VIX futuresterm structure, negative roll yield, contango and backwardation.  (Those who have been paying attention since the early days of VXX and VXZ have no doubt profited mightily from this knowledge.)

The beauty of EVIX and EXIV is that these products create so much flexibility for investors who maintain a global, cross-asset class view of volatility.  In the run-up to the first round of the French election, for example, VSTOXX spiked dramatically and pushed the VSTOXX:VIX ratio below 1.00, creating some interesting arbitrage opportunities and/or pairs trades in the process.  Now investors can trade euro zone volatility against U.S. volatility, use targeted hedges for risk that is specific to the euro zone or speculate more easily about the direction of volatility in the euro zone.

I encourage everyone to study the EVIX and EXIV prospectus closely.

This is a huge development in the volatility space and if options on EVIX and EXIV follow later this week, as expected, the volatility trading landscape will be much richer and more diverse. 

Now if we can only get liquid volatility products for gold volatility (GVZ) and crude oil volatility (OVX), I won't even have to set out a stocking next to the chimney this Christmas.

While I'm at it, why are there no options on XIV?  This is such a popular high-beta product that it deserves options so traders can express a broader range of opinions on volatility.  Readers, it never hurts to nudge the CBOE on these issues.  An outpouring of popular sentiment can make a difference.

As the risk of charging off into full rant mode, I feel compelled to say that I hope volatility investors know a good thing when they see it.  It is a shame that VXST futures did not attract enough attention to hang around and that VMAX and VMIN are not trading with higher volumes.  One of the best volatility products ever created, ZIV, nearly died of neglect before investors finally paid it some attention.

As I see it, EVIX and EXIV as well as VMAX and VMIN are test cases for the future of the breadth of volatility products.  If you would like a diverse tapestry of volatility products in the future, it would not hurt to "buy local" volatility ETPs rather than sticking to the handful of already successful products.  If you don't vote with your feet, you had better be happy playing in a small and rather limited sandbox.  I am fond of saying, "In volatility, there is opportunity!" - but that opportunity is a function of the richness of the various volatility product platforms.

Last but not least, I know Eurozone and eurozone are the preferred spellings, but I am sticking to the two-word "euro zone" with as much stubbornness as I can muster.  What can I say, I am short convention"

Further Reading:

For those who may be interested, you can always follow me on Twitter at @VIXandMore

Disclosure(s): net short VXX and VMAX; net long XIV and ZIV at time of writing.  The CBOE is an advertiser on VIX and More.


SDI Glossary: "CBOE" Definition
SDI Glossary: "Equity" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "Futures" Definition
SDI Glossary: "Risk" Definition
SDI Glossary: "Short" Definition
SDI Glossary: "Stock" Definition
SDI Glossary: "VIX" Definition
SDI Glossary: "Volatility Index " Definition
This Article's Word Cloud:   ETNs   EVIX   EXIV   European   Evolution   Greece   Risk   Spain   This   VIIX   VMAX   VMIN   Volatility   about   attention   been   days   euro   follow   from   future   have   into   investors   know   long   maturity   more   much   opportunity   options   popular   product   products   rather   risk   short   side   sticking   that   there   these   this   those   trades   volatility   will   with   would   zone

| More

The Stabbing Bull Selloff November 15
Wed, Nov 15, 2:51 PM ET, by Corey Rosenbloom

As an intraday (or short-term) trader, we do best when we recognize repetetive price patterns ...

Webinar Lessons from 18 Years of Active Trading with Corey this Thursday
Tue, Nov 14, 2:21 PM ET, by Corey Rosenbloom

I’m so excited about this opportunity to share with you the lessons – good and ...

A Lesson from the V Spike Intraday Reversal Today Nov 14
Tue, Nov 14, 12:11 PM ET, by Corey Rosenbloom

Today’s intraday V-Spike Reversal gives us a chance to study the set-up to trade an ...

SP500 Simply Slams the Rising 20 Day EMA Target Again
Thu, Nov 9, 1:31 PM ET, by Corey Rosenbloom

Like Lucy and the football with Charlie Brown – always frustrating him at the last ...

The Bullish Turn and Range Action in Gold Nov 7
Tue, Nov 7, 11:41 AM ET, by Corey Rosenbloom

We posted about a Bullish Surge in Crude Oil this morning, and we’ll now combine ...

The Crude Oil CL Surge November 7
Tue, Nov 7, 11:31 AM ET, by Corey Rosenbloom

It’s the Crude Oil Surge and Breakout! Price reversed up off a key inflection point ...

Vegas Expo 2017 Two Week Trial Member Special
Sun, Nov 5, 12:11 PM ET, by Corey Rosenbloom

If you’re new to Afraid to Trade or have been wanting to check us out, ...

Once again Market Hangs Out at the Highs to begin November
Wed, Nov 1, 3:35 PM ET, by Corey Rosenbloom

Will we get our expected retracement? Let’s chart the course and update the plan for ...

Failed Reversal Takes us to New Lows for Chipotle CMG
Mon, Oct 30, 2:21 PM ET, by Corey Rosenbloom

Almost but not quite! Chipotle (CMG) shares plunged to new lows today after failing to ...

Euro Zone VSTOXX ETNs Land on U.S. Beaches!
Mon, Oct 30, 8:21 AM ET, by Bill Luby

Think the market is too complacent about this weekend's election in France? Worried that the ...

A Wednesday Market Pullback to Support Target
Wed, Oct 25, 1:11 PM ET, by Corey Rosenbloom

Surprisingly, the market can actually trade lower! Today saw a successful retracement swing – finally ...

Support Pivot in Play for Netflix NFLX Here
Fri, Oct 20, 3:11 PM ET, by Corey Rosenbloom

Netflix (NFLX) shares continue the uptrend in motion and we just saw a sharp pullback ...

Top Ten Bullish Trending Stocks Extended above the 200 Day SMA October 18
Wed, Oct 18, 2:21 PM ET, by Corey Rosenbloom

Did you know this market will NEVER go down again? Ok that’s not actually true ...

Peculiar Patterns on the Four Equity Futures October 17
Tue, Oct 17, 1:11 PM ET, by Corey Rosenbloom

Which of our four equity markets is the strongest/weakest and what patterns are emerging? Let’s ...

Exploring the Emini Extended Run Volume Profile Chart
Thu, Oct 12, 1:41 PM ET, by Corey Rosenbloom

Will we ever get a pullback in this extended market? It sure feels like we ...

Market Still Holding at the Extended Highs October 11
Wed, Oct 11, 3:31 PM ET, by Corey Rosenbloom

Stocks continue to hold the highs at the 2,550 “Open Air” level on an extended ...

Join Me at the Las Vegas Traders Expo in November
Thu, Oct 5, 4:31 PM ET, by Corey Rosenbloom

It’s right around the corner! It’s the big International Traders Expo in Las Vegas this ...

Impressive Emini Rally and the Volume Profile Level to Watch
Wed, Oct 4, 12:21 PM ET, by Corey Rosenbloom

With the stellar rally in the market taking us to new all-time highs, what level ...

Nine Sector Grid Overview Shows Bullish Strength
Wed, Oct 4, 11:51 AM ET, by Corey Rosenbloom

As the market jumps to another new all-time high, let’s step inside the market to ...

Market Keeps the Bullish Uptrend Going Strong
Tue, Oct 3, 2:11 PM ET, by Corey Rosenbloom

Though it may feel weird, the market just simply keeps plowing higher in a triple ...

Three Surprisingly Bearish Breakdown Stocks on the Big Bullish Day
Wed, Sep 27, 5:11 PM ET, by Corey Rosenbloom

If you looked at the stock market’s strength and new intraday high today, you’d likely ...

Get Your Copy of the Big Book of Pro Trading Strategies Today
Thu, Sep 21, 5:21 PM ET, by Corey Rosenbloom

I’m excited to announce that I contributed an in-depth chapter to the new “Big Book ...

Market Slams First Support Target on Volume Profile Chart
Wed, Sep 20, 2:41 PM ET, by Corey Rosenbloom

If you made note of yesterday’s “Professional Volume Profile ‘Look Out Below!’ Levels” post, you’ll ...

Professional Volume Profile and Look-Out-Below Target Levels for Emini
Tue, Sep 19, 4:41 PM ET, by Corey Rosenbloom

With the market hanging out at all time highs, drifing back today, what levels should ...

Tightly Coiled Market at All Time Highs Sept 15
Fri, Sep 15, 3:21 PM ET, by Corey Rosenbloom

Are we having fun yet? The S&P 500 and Emini (@ES) trade shy of the ...

Tesla TSLA Breaks a Triangle to Travel Toward the Highs
Thu, Sep 14, 1:21 PM ET, by Corey Rosenbloom

If you’re a “Tesla Trader,” you’re likely excited about the recent breakout event! Tesla TSLA ...

A Big News Crash in Uptrending Equifax EFX
Wed, Sep 13, 9:31 PM ET, by Corey Rosenbloom

You’ve probably heard about the large-scale data breach exposing customer data at Equifax (EFX). We’re ...

A Rapid Return to Risk ON Money Flow in our Quad Market Grid
Tue, Sep 12, 3:51 PM ET, by Corey Rosenbloom

As if there were never any doubts, equities surged to new all-time highs this week. ...

Charting SP500 Breadth from Stocks Above Daily MAs Sept 7
Thu, Sep 7, 2:11 PM ET, by Corey Rosenbloom

Like a strong tree rotting on the inside, the S&P 500 breadth currently tells a ...

Emini Still Trades and Bounces within our Grid Sept 6
Wed, Sep 6, 2:41 PM ET, by Corey Rosenbloom

Our breakout beyond 2,470 was short-lived last week. Now, we’re back within our grid. ...

Join Me and Thousands of Fellow Traders at the Money Show Dallas October!
Fri, Sep 1, 4:41 PM ET, by Corey Rosenbloom

It’s rapidly approaching! It’s your chance to attend the 2017 Money Show in Dallas from ...

Market Slices through Fibonacci Grid like a Hot Knife through Butter
Thu, Aug 31, 12:41 PM ET, by Corey Rosenbloom

Wow, that was fast! Stocks rebounded like a rocket off our 2,425 Fibonacci Pivot. Let’s ...

Snapchat SNAP Beneath Major Resistance Target in Downtrend Aug 30
Wed, Aug 30, 2:31 PM ET, by Corey Rosenbloom

If you’ve been trying to find a bottom in Snapchart, August may have been your ...

Emini Plays the Fibonacci Levels like a Fiddle Aug 30
Wed, Aug 30, 2:21 PM ET, by Corey Rosenbloom

We finally got a breakout of our Fibonacci Grid!!! Here’s today’s big update in price ...

Daily Charting the Dollar Breakdown and Gold Bullish Breakout
Mon, Aug 28, 2:31 PM ET, by Corey Rosenbloom

Let’s expand the perspective on today’s “Dollar Drop and Gold Breakout.” The two charts below ...

The Dollar Drop and the Gold Surge August 28
Mon, Aug 28, 2:11 PM ET, by Corey Rosenbloom

We don’t fight or fade trends in motion, and the big gap-and-trend action in both ...

The Market Loves Loves Loves this Tiny Range Aug 28
Mon, Aug 28, 1:51 PM ET, by Corey Rosenbloom

Don’t adjust your dial! Yes, we’re STILL within the Fibonacci Range. Here’s today’s @ES Fibonacci ...

Join Us Friday for a Special Traders Talk Live Day of Webinars!
Thu, Aug 24, 8:11 PM ET, by Corey Rosenbloom

I’m so excited to join the line-up of expert traders who will be presenting various ...

Once Again the Emini Plays the Tight Range Aug 24
Thu, Aug 24, 1:21 PM ET, by Corey Rosenbloom

As we trade today’s session, we’re STILL within the tiny Fibonacci Boundaries of yesterday. Here’s ...

Emini Playing the Tight Fibonacci Range Today Aug 23
Wed, Aug 23, 3:11 PM ET, by Corey Rosenbloom

We expect Range Contraction (consolidation) after big Trend Days like yesterday. At the moment, that’s ...

SnapChat SNAP Surges to Falling Target on Bullish Engulfing Play
Wed, Aug 23, 2:31 PM ET, by Corey Rosenbloom

The last time I posted on SnapChat (SNAP) I clearly highlighted the “Aggressive Bottom Fishing” ...

Join Me TONIGHT for a Unique Stock and Trade Forecast Panel - Analyze Your Trades!
Tue, Aug 22, 12:21 PM ET, by Corey Rosenbloom

We’re excited to invite you to a special event tonight! I’m sure you’ve attended trading ...

A Longer Term View of our Collapse in Market Volatility
Tue, Aug 22, 12:11 PM ET, by Corey Rosenbloom

We know that volatility is lower in our current environment, but by how much… and ...

ULTA Beauty Plays Desperately for a Longer Term Support Bounce
Mon, Aug 21, 4:11 PM ET, by Corey Rosenbloom

Can they do it?! Can they do it? Buyers will be eager to step in ...

LuluLemon LULU Squeezes its way Between the Daily EMAs
Mon, Aug 21, 3:51 PM ET, by Corey Rosenbloom

Shares of Lululemon (LULU) jumped today, but merely continued the “ping-pong” between the 20 and ...

Helpful Pullback Price Planning Grid for NAS Dow and SP500
Fri, Aug 18, 2:21 PM ET, by Corey Rosenbloom

How far have the “Big Three” US Equity Indexex pulled back, what level tips them ...

WalMart WMT Perfectly Straddles the Daily EMAs ahead of Breakout
Thu, Aug 17, 2:51 PM ET, by Corey Rosenbloom

During today’s big sell session, Wal-Mart (WMT) collapsed toward its 50 day EMA target. However, ...

Amazon AMZN Fails at Overhead Wall of Resistance
Thu, Aug 17, 12:21 PM ET, by Corey Rosenbloom

I featured Amazon (AMZN) as a bearish swing trading candidate in last night’s member report ...

Energy XLE Downtrends to New Low
Wed, Aug 16, 12:31 PM ET, by Corey Rosenbloom

So far in 2017 we’ve seen relentless selling pressure in the XLE (Energy ETF). Here’s ...

Aggressive Bottom Fishing in SnapChat SNAP
Wed, Aug 16, 12:11 PM ET, by Corey Rosenbloom

New and aggressive traders often enjoy searching for that elusive trend reversal trade, also known ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

Euro Zone VSTOXX ETNs Land on U.S. Beaches! | Self Directed Investor | Copyright © 2008 - 2017, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of serious individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.