Explain VIX ETFs to me like I'm 5

nursebee · Apr 21, 2013

abcppp,
so you want an explanation of these as if you were five?

NO, Because I told you so!

failed_trad3r · Apr 21, 2013

contango and backwardation explains all. the vix cannot be traded, only the vix futures.

1a2b3cppp · Apr 21, 2013

It does not appear that OEC has VIX futures. Do only certain brokers have them?

kroponer · Apr 21, 2013

Avoid VIX products, very complex and easier to lose money than trading outright stuff like ES and CL.

1a2b3cppp · Apr 22, 2013

Quote from kroponer:

Avoid VIX products, very complex and easier to lose money than trading outright stuff like ES and CL.

Maybe those ETFs, yeah, cuz they don't really seem to follow the VIX very closely.

nillionaire · Apr 22, 2013

Quote from 1a2b3cppp:

These all suck and drift downward over time.

How does that suck exactly?

1a2b3cppp · Apr 22, 2013

Quote from nillionaire:

How does that suck exactly?

Well I mean I guess you can just short all of them and hope one doesn't go up to $1,000:

AAAintheBeltway · Apr 22, 2013

Good luck getting a locate on them to short. I'd hate to guess the fee either.

cvds16 · Apr 22, 2013

I used to be an equity and equity index option market maker. I don't even claim to fully understand vix futures exactly ... how much chance do you stand ?
Vix stuff is not for 5 years olds ...

1a2b3cppp · Apr 22, 2013

The VIX goes up and down.

I want to trade something that mimics its movement.

I don't think there's any complex understanding required. I don't care how VIX is calculated; I want to trade something that behaves like the VIX.