Top Ways to Trade Fear in the Market

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FILE PHOTO: A sales manager looks at a screen which shows the decline in value of French CAC 40 stocks at Allianz Global Investors in Paris

Panic has returned to the market – again.

The major indices are slipping on inflationary concerns, fears of recession, aggressive rate hikes, and uncertainty over what could happen next.  As a result, investors are panicked.  They’re selling everything.

So, how can we trade the current volatility out there?

We can trade ETFs and ETNs, which track the Volatility Index.

Pro Shares Ultra VIX Short-Term Futures ETF (UVXY)

As the VIX pops, so does the UVXY ETF.

The Volatility Index and the UVXY ETF could see higher highs. All thanks to uncertainty about what could possibly happen next. For those of you that are new to the UVXY, the ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index. As the VIX moves higher, the UVXY typically follows.

iPath S&P 500 VIX Short-Term Futures (VXX)

The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index.

ProShares VIX Short-Term Futures ETF (VIXY)

ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.