Traders Addicted to Volatility Make ETPs Among the Most Popular

(Bloomberg) -- Traders just can’t stop betting on volatility.

Four exchange-traded products that wager on price fluctuations were among the 10 most-traded of the day, data compiled by Bloomberg show. Of those, three benefit if volatility climbs; the other wins if the market calms down.

It’s less than a week since the blow-up in XIV, the short-volatility ETN issued by Credit Suisse Group AG, hurting professional and retail investors alike. But for traders, it seems that’s plenty of time for reflection as they look to similar products to profit from swings in the S&P 500 Index.

UVXY, the $454 million ProShares Ultra VIX Short-Term Futures fund which is two-times leveraged, traded more than 56 million shares -- the third-most traded ETP in the U.S. -- as of 12:10 p.m. in New York, 28 percent higher than its 30-day average. To put that in context, the SPDR S&P 500 ETF Trust, the largest ETP with more than $270 billion in assets, traded 66 million shares.

TVIX, the VelocityShares Daily 2x VIX Short Term ETN that, like XIV, was issued by Credit Suisse, traded more than 52 million shares, while VXX, the iPath S&P 500 VIX Short-Term Futures ETN, traded in excess of 42 million units. They were the fourth and sixth most-traded, respectively.

SVXY, the ProShares Short VIX Short-Term Futures product which halted trading during the carnage that followed the Cboe Volatility Index’s biggest spike on record, traded more than 20 million shares. That was the 10th most-traded product of the day.

--With assistance from Kailey Leinz

To contact the reporter on this story: Rachel Evans in New York at revans43@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh, Randall Jensen

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