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VXX (iPath® S&P 500 VIX Short-Term FuturesTM ETN) is one of the most popular products related to trading market volatility. VXX attempts to track changes in the VIX Index through near-term VIX futures.
More specifically, VXX performance is tied to 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 VXX works in relation to the near-term VIX futures. Additionally, you’ll learn how VXX can perform during periods of VIX futures contango and backwardation.
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.
Note: The original VXX product matured in January of 2019 and VXXB was launched to take its place. In May of 2019, Barclays changed VXXB back to the original VXX ticker symbol.
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