Sun, Aug 16, 2026
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

The short-vol trade is dead, long live short-vol

Friday, February 09, 2018

Bailey McCann, Opalesque New York:

The correction is here - or is it? Monday's spike in the VIX took two scalps - $XIV and Nomura's Next Notes S&P 500 VIX Short-Term Futures Inverse Daily Excess Return Index ETN. There was one survivor - ProShare's inverse volatility ETF $SVXY and it's already bounced back.

"I think the market has spoken on this. Everyone knows what's up with these products now, but if you look at the asset flows this week $SVXY could end up Forrest Gumping its way back to where it was before Monday," Scott Billington, Co-Founder of Covenant Capital Management tells Opalesque. And, the numbers bear him out. $SVXY started 2018 with approximately $770 million of AUM, but when the dust settled after the VIX spiked on Monday, the ETF had just $97.3 million left. Still, investors haven't abandoned the short volatility trade just yet. Asset flows into $SVXY have rebounded and by market close on Tuesday $SVXY was back up to $409 million. By Wednesday? $766 million.

Billington isn't surprised to see investors come back. "There's obviously market demand for being able to take both sides of the VIX," he says, adding that the criticism of volatility products may be a bit overblown. "Unless someone was just outright lying to investors when they sold this product, the possibility that it would go to zero is outlined in the prospectus. If you do the math on how these things work it should be clear to you that they were going to g......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Nvidia extraordinary growth and the challenge of sustaining demanding valuations over time[more]

    Antonio Di Giacomo, Senior Market Analyst at XS.com, writes: Nvidia has established itself as one of the most extraordinary growth companies in the global technology sector. Over the past two fiscal years, its revenues have risen from levels close to $60 billion annually to well above $120 billi

  2. And, finally: Time to share it with the people[more]

    From Newsoftheweird: Leavenworth, Washington, has become a tourist destination because of the Bavarian theme businesses have adopted there, NPR reported. One shop, the Leavenworth Nutcracker Museum, houses the world's largest nutcracker collection, thanks to 101-year-old Arlene Wagner. Wagner sta

  3. Opalesque Exclusive: Private Markets Evergreen Funds - An Insider's View[more]

    Matthias Knab, Opalesque for New Managers: Private Markets Evergreen Funds: What Investors Need to Know Before They Dive In The democratization of private markets is well underway. Structural barriers t

  4. 755 Unicorns, $8 Trillion: Fifth Era maps the autonomous digital economy[more]

    Matthias Knab, Opalesque for New Managers: Fifth Era Partners, a specialized asset manager focused on the convergence of Internet, AI/Agentic and Blockchain technologies, has released the findings of its 13th Bia

  5. Opalesque Exclusive: Governance, Scale, and Boutique Resilience in a Consolidating Hedge Fund Industry[more]

    Matthias Knab, Opalesque for New Managers: The hedge fund industry has undergone significant consolidation in recent years, with capital increasingly concentrated among large multi-strategy platforms. Yet boutique m