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The World’s Biggest Volatility ETF Grows 40% in Just Four Days

Published 02/11/2021, 07:56 AM
Updated 02/11/2021, 08:00 AM
© Reuters The World’s Biggest Volatility ETF Grows 40% in Just Four Days

(Bloomberg) -- The biggest exchange-traded fund that profits from U.S. stock volatility has added more than $600 million of new money in less than a week.

The ProShares Ultra VIX Short-Term Futures ETF (ticker UVXY) now boasts $2.2 billion in assets, up from $1.6 billion late last week, according to data compiled by Bloomberg. Activity in the fund is surging, with trading volume on Wednesday jumping to more than three times the one-year average.

Exactly what’s behind the sudden frenzy remains unclear. Some of the recent demand may be driven by wagers on the Cboe Volatility Index to rise. However investors could also be acquiring shares of UVXY in order to lend them out -- in effect betting against it and on enduring calm in the equity market.

The latter view finds some support in the number of shares sold short, which has jumped to about 4.6 million -- the highest since March -- according to data from IHS Markit Ltd.

Read more: Traders Shorting VIX Spur Inflows to $1.2 Billion Fund Down 34%

UVXY has attracted net inflows of $2.22 billion in the past year. The following table shows the fund’s biggest holdings as of Feb. 10:

(Updates throughout with context, data)

©2021 Bloomberg L.P.

 

Latest comments

Never short an instrument like UVXY outright. You could lose more than your shirt.
Will they repost this today? Or tomorrow?
one can use uvxy as an indicator
Banks shorting UVXY just like silver and gold
+10% contract roll premium each month, so not a bad little return.
Go to the ProShares web site and watch the press releases. With UVXY at 10 or lower it's about time to do a reverse split. Knowledge from a person who has shorted UVXY for a long time. I am up nicely in that but I cover before split and then start all over again after the split and enjoy the decay in UVXY.
he's not buying. he's selling short. decay + low volatility = large gains, until a spike arrives.
I somehow feel market is going to be super volatile in the next few weeks. Probably not the time to short.
Just curious do you use options or just short it and pay the daily fee's?
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