I love volatility and more so when the liquidity created out of thin air,almost USD 20 trillion built up by central bankers since lehman fiasco is going to start unwinding in next couple of months. We saw a glimpse of jittery market in the month of FEB and Mar where this ETN after staying at almost $30 for few months shot up to touch $70 in one day.So when everything fell in price the price of this security went up and thats why It is a great way of hedging equity portfolios.
This ETF offers investors a way to access equity market volatility, an asset class that may have appeal thanks primarily to its negative correlation to U.S. and international stocks. The VIX index tends to spike when anxiety increases, and as such often moves in the opposite direction of stocks. However, it’s important to note that VXX does not represent a spot investment in the VIX, but rather is linked to an index comprised of VIX futures. As such, the performance of this product will often vary significantly from a hypothetical investment in the VIX (which isn’t possible to establish).