Volatility Linked ETPs

Volatility Linked ETPs

Cboe Global Markets has long history with respect to exchange listed volatility derivatives. Futures contracts based on the Cboe Volatility Index® (VIX® Index) were first listed at the Cboe Futures Exchange (CFE®) in 2004. Two years later, in 2006, Cboe Global Markets introduced VIX cash settled index options. The third type of listed volatility product was introduced by Barclays in the form of the iPath® S&P 500® VIX Short Term FuturesTM ETN (VXX).


What are ETFs and ETNs?



Several firms followed Barclays' lead through introducing exchange traded note or exchange traded funds that offered exposure to the market's expectation of volatility. There are long, short, leveraged, and strategy based ETPs as well as those that offer exposure to volatility futures on the European stock market.

As a leader in creating listed volatility derivatives, Cboe Global Markets has the responsibility to offer education on all methods of gaining exposure to expected market volatility. This site addresses exactly what exposure these ETPs offer as well as answering some common questions with respect to volatility linked exchange traded products.

Investments in ETPs involve risk, including the possible loss of principal, and are not appropriate for all investors. Non-traditional ETPs, including leveraged and inverse ETPs, pose additional risks and can result in magnified gains or losses in an investment. Specific risks are outlined in the fund prospectus and may include concentration risk, correlation risk, counterparty risk, credit risk, market risk, interest rate risk, volatility risk, tracking error risk, among others. Investors should consult with their tax advisors to determine how the profit and loss on any particular investment strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations. The information in this program is provided for general education and information purposes only. No statement within this program should be construed as a recommendation to buy or sell a security or to provide investment advice.

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