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Market Measures

Monday – Friday | 9:00 – 9:20a CT

Short VXX

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

This segment of Market Measures discusses the importance of understanding the risks associated with trading volatile products.

As traders, we like to sell premium because of the mean reverting nature of implied volatility. For this reason, some traders look to sell VXX. At first glance, shorting the VXX in January 2009 looks like the greatest short of all time. However, this trade is more complex and carries risks that traders should be aware of when trading volatile products.

Tune in as Tom and Tony walk through a study on this matter, explaining why it is important to fully evaluate the risks of a product before trading.

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