It shouldn’t be too surprising that the XIV exchange-traded note – which is designed to deliver the inverse performance of the well-known CBOE Volatility Index (or the VIX) on a daily basis – is attracting fresh attention after surging as much as 87 percent this year.
But, as CNBC notes, some caution that investing in the exchange-traded product now could be deeply risky.
This could be “the most dangerous trade in the world,” according to macro strategist Boris Schlossberg of BK Asset Management.
“It’s already had a massive runup because we’ve had very low volatility,” but at this point, “it’s very likely that volatility is going to increase,” Schlossberg said Thursday on CNBC’s “Trading Nation.”
The rise in this product hasn’t escaped traders’ attention. In terms of the dollar value of shares traded, the short-VIX-futures XIV has actually surpassed the long-VIX-futures VXX.
This post was published at Zero Hedge on Jul 10, 2017.