Sunday, January 25, 2009

Barclays VIX ETNs Slated to Begin Trading on Friday

Information pertaining to the two new VIX ETNs is hard to come by at this point, but Jamie Tyrrell’s (optionMONSTER) Volatility Sonar report from Friday indicates that a Barclays representative is talking about a launch this Friday, January 30th.

While I am not sure if the tickers have been finalized, I just now discovered an August 27, 2008 prospectus that describes the ETNs at some length and lists a VXX ticker for the iPath S&P 500 VIX Short-Term Futures ETN and a VXY ticker for the iPath S&P 500 VIX Mid-Term Futures ETN.

After I have had a chance to study the prospectus I will offer up more on these new ETNs.

In the meantime, some of the usual suspects have already offered some thoughts on the subject:

19 comments:

  1. looking forward to hear what you have to say, thanks for the link..

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  3. Bill, do you believe these vehicles will exaggerate volatility? I love ETNs/ETFs for their liquidity, but I do believe their proliferation must be adding to overall volatility. I am making the assumption that the average retail trader follows a me-too approach, causing most market moves to overshoot.

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  4. Hi Eric,

    I do not see a high risk of runaway volatility that results from a feedback loop effect. Frankly, I remain unconvinced that a feedback look or vicious cycle effect has been a significant issue with some of the ETFs, with the possible exception of leveraged ETFs.

    At the very least, however, we will have our own VIX laboratory to test some of these hypotheses.

    -Bill

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