The fear is palpable.
At the moment, the Dow is down 800 points, as the NASDAQ sinks 408.
According to The Wall Street Journal, “The retreat came amid concerns over property developer China Evergrande Group. Market participants increasingly believe that Beijing will let Evergrande fail and inflict losses on its shareholders and bondholders. The company’s debt burden is the biggest for any publicly traded real-estate management or development company in the world.”
That, coupled with the irus, fears of an economic slowdown, tapering, geopolitical issues, and an upcoming Federal Reserve meeting, volatility is skyrocketing.
With the exception of the China Evergrande Group news, we all knew this was coming.
It’s why – on August 17 – we highlighted opportunity in volatility trades, including:
ProShares Ultra VIX Short-Term Futures ETF (UVXY)
The ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index. On August 17, the UVXY traded at $24.25. It’s now up to about $30, and could easily race higher, as fear escalates.
iPath S&P 500 VIX Short-Term Futures (VXX)
The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index. The VXX last traded at $27 and could easily run well above $30, near-term with the chaos, we said on August 17. Nowadays, the VXX is up to $31.56.
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.
At the time, the VIXY traded at $22. It’s now up to $25.81.
Until there’s clarity on the situation in China, and with the Fed, and with the economy, volatility could easily continue to spike.
The post Three of the Top Ways to Protect for Further Chaos appeared first on Morningology.
