What is XIV & How Does it Work? | Volatility Trading

XIV is one of the most popular products related to trading market volatility. XIV attempts to track the inverse of the changes in the VIX Index through near-term VIX futures.

More specifically, XIV performance is tied to the inverse of the daily percentage returns of the S&P 500 VIX Short-Term Futures Index, which tracks the returns of near-term VIX futures with a weighted-average time to maturity of 30 days.

In this video, you'll see visualizations that show you EXACTLY how XIV works in relation to the near-term VIX futures. Additionally, you'll learn how to identify situations in which XIV may perform poorly, and also situations in which it could rise substantially.

Through watching this video, you'll be much more informed about how volatility products are structured, which will help you make more informed decisions when trading volatility.

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[projectfinance]

Ultra-Competitive Commissions. Close Trades for Free.* $10 Commission-Cap Per Option Leg.**

[carldebiase]

If everyone would stop selling the XIV, we could bid it up to $1, 000/share and put Credit Suisse out of business when they pay us back on February 21st!!!

[TheFedosso]

Great tutorial. Would you say that the best way for a private investor to short the VIX would be shorting VIX calls since shorting VIX futures can be very expensive?

[jumpingjim.]

So this index doesn't exist anymore?