|Bid||34.01 x 900|
|Ask||34.05 x 1000|
|Day's Range||33.91 - 34.02|
|52 Week Range||24.02 - 69.79|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||-50.93%|
|Beta (5Y Monthly)||-0.58|
|Expense Ratio (net)||1.38%|
Exchange-traded funds (ETFs) are an increasingly popular way for investors to gain convenient exposure to a wide variety of asset classes. These range from highly popular investments, such as domestic stocks and precious metals, to more specialized trades used by a smaller community of sophisticated investors.
Novel coronavirus fear spiralled out of control. States have issued "stay at home" orders. Schools closed for the year. Events were cancelled. Flights were grounded. All thanks to a global pandemic that has now affected more than 400,000 people just in the U.S. Fear was so out of hand, the CBOE Volatility Index (CBOE:VIX) rocketed to a high of 83 before falling to a current level around 43.And, at the time, some of the safest opportunities were those I first mentioned on Feb. 27, including the ProShares Ultra VIX Short-Term Futures ETF (NYSE:UVXY), which ran from $20 to a high of $135. The Velocity Shares Daily 2x VIX Short-Term ETN (NASDAQ:TVIX) ran from $86.50 to a high of $1,000. Even the iPath S&P 500 VIX Short-Term Futures (AMEX:VXX) ran from $21 to a high of $78.84.Though, at some point, volatility will begin to fall.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Penny Stocks To Buy with Massive Upside Potential When that happens, you want to be well positioned to make money from that, too. Here are the top three ways to do just that. * Short VIX Short-Term Futures ETF (NYSE:SVXY) * VelocityShares Inverse VIX Mid-Term ETF (NASDAQ:ZIV) * Invesco QQQ ETrust (NASDAQ:QQQ)These three exchange-traded funds (ETFs) or exchange-traded notes (ETNs) are the ones to watch. But a word of warning -- some of these funds intend to match the daily results of the index, and holding them long-term can introduce its own volatility. Profit From Volatility: ProShares Short VIX Short-Term Futures ETF (SVXY)Expense Ratio: 0.95%, or $95 per $10,000 invested annuallyMy first pick is the SVXY. This ETF was designed to offer one half the inverse of the S&P 500 VIX Short-Term Futures Index, daily. Along with the VIX, it was designed to track the changes in expectations for one month in the future.At the moment, the ETF trades around $32 after diving from a high of $67.50. With a good chunk of fear firmly priced into the market, the SVXY ETF could refill a bearish gap around $66, near-term. Of course, plenty of patience is required at the moment.We must also remember that crisis often leads to big opportunity. As even billionaire Warren Buffett will tell you, be fearful when others are greedy, and greedy when others are fearful. Baron Rothschild also teaches us to "buy the blood in the streets." VelocityShares Inverse VIX Mid-Term ETN (ZIV)Source: Shutterstock Expense Ratio: 1.35%My second volatility pick is the ZIV. This ETN was designed to offer inverse exposure to an index of VIX futures. It seeks -1x the returns of the S&P 500 VIX Mid-Term Futures for a single day. As volatility decreases, the ZIV ETN will typically push higher.At the moment, the ETN trades around $32 after tumbling from a Feb. 2020 high of $76.47. With a good amount of patience, I strongly believe the ZIV ETN could refill its bearish gap around $75 a share. * 7 Companies That Deserve to Be S&P 500 Stocks As even Sir John Templeton would tell investors, "The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell." Invesco QQQ ETF (QQQ)Another way to trade deflating volatility is by buying the QQQ, which I mentioned on March 25, 2020 as it traded at $185 a share. At the moment, it's up to $202 and could refill a bearish gap around $230 a share with patience.The beauty of the QQQ ETF is that it offers more for less. And most of its top holdings are wildly oversold on coronavirus fears. For less than $200 a share, you're offered exposure to tech companies, like Tesla (NASDAQ:TSLA), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Adobe (NASDAQ:ADBE) and dozens more at a steep discount.With a good amount of fear priced in, I strongly believe the QQQ is overdue for a big rally.Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * America's 1 Stock Picker Reveals Next 1,000% Winner * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post The Top 3 Ways to Trade a Pullback in Volatility appeared first on InvestorPlace.
In a market that has been steadily climbing despite impeachment proceedings against President Trump, a roller-coaster ride due to tariffs and a trade war with China, and generalized global uncertainty, volatility has become relatively complacent. The VIX or CBOE Volatility Index, which is commonly referred to as the "fear gauage", and is used by many traders and analysts as a measure of how carefree investors are, has been moving toward 12, and bouncing back up, causing periodic disruptions to stocks in this long running bull market since November. Since last week the VIX has bounced 32%, corresponding to a drop in stocks, as investors express concern over the Chinese coronavirus, which shows new cases daily.
Options bets suggest that traders may be a bit too unnerved about the risks facing the stock market heading into the end of the year. History suggests that such complacency could come back to bite them. Just a day before the CBOE VIX or Volatility index exploded higher in late July, I wrote about the monstrous rally the market had in June and July, recovering all of its May losses and repeatedly chronicling fresh highs, during which time the VIX had coiled, settling around the 11-12 level, amid investor complacency.
Just a day before the CBOE VIX or Volatility index exploded higher in late July, I wrote about the monstrous rally the market had in June and July, recovering all of its May losses and repeatedly chronicling fresh highs, during which time the VIX had coiled, settling around the 11-12 level, amid investor complacency. With the market having made fresh highs recently, the VIX had once again moved back into the 13-14 area over the last week, and now a storm could be brewing all over again. Just in time for the spookiest time of the year, stocks have once again rallied back to within inches of their all-time highs, only to sell off again just a day after the Fed announcement, inciting a coiled VIX to rally from a low of 13.27 yesterday to a high 15.84 today, a nearly 20% increase in one day.
It adds to the volatility created by President Donald Trump reversing the trade truce established with China, saying that a 10% charge would be imposed on $300 billion worth of Chinese goods coming Sept 1. The added volatility has created opportunities for traders who are positioning to continue to reap big money as the sell-off gains steam. Sizable bets had been placed on a comeback in market volatility in the two weeks leading up to the Fed’s Wednesday policy meeting.