What are VXX calls?

The VXX is an Exchange Traded Note (ETN) that tracks the VIX short-term futures. To be more specific, the VXX is a portfolio composed of the front two month /VX futures that bear continuously changing weights.

When should I buy VXX calls?

Best Times to Day Trade Volatility ETF/ETNs

  • Buy VXX when the S&P 500 is declining.
  • Short VXX following a price spike, once the S&P 500 begins to rally higher again, and VXX is falling.

How long should you hold VXX?

As you can see, VXX tends to dramatically underperform the outright changes in the VIX with holding periods as short as a month on average lagging by 5% or more. This essentially means that if the VIX were to go nowhere during a month, then on average, you would lose 5% of your VXX holdings over that time period.

What causes VXX to go up?

It’s important to note that VXX’s increase is caused by the increase in the January and February VIX futures, not the VIX Index itself. Also, the chart above only shows the price movements in points, not percentages.

Why is VXX always down?

If futures are priced above the spot, this means that futures are falling towards the spot market and roll yield is therefore negative. Roll yield is why VXX is losing money almost all of the time – it is holding futures which are priced above the spot level of the VIX, and through time, these futures converge.

How do you trade on VXX?

The primary way to trade on VIX is to buy exchange-traded funds (ETFs), and exchange-traded notes (ETNs) tied to VIX itself. ETFs and ETNs related to the VIX include the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) and the ProShares Short VIX Short-Term Futures ETF (SVXY).

Can I buy and sell VXX?

For the most part, VXX trades like a stock. It can be bought, sold, or sold short anytime the market is open, including pre-market and after-market time periods.