Hello all, I am slowly getting into the whole world of investing. However, this ETF caught my attention. I understand that it is supposed to be for advanced traders but wanted to ask If anyone can explain how this ETF works? Here is the description from Financial Times. "The investment seeks daily investment results, before fees and expenses, that correspond to one and one-half times (1.5x) the performance of the S&P 500 VIX Short-Term Futures Index for a single day. The index seeks to offer exposure to market volatility through publicly traded futures markets and is designed to measure the implied volatility of the S&P 500 over 30 days in the future." However, I am having difficulties understanding what does that mean. Thank you very much in advance
The math behind it can get complicated, but in laymens terms its simply a leveraged position that will move 1.5x what ever the futures are doing. This is highly risky and is typically not a long term position you can hold due to fluctuations. More on leveraged ETFs here https://www.investopedia.com/articles/exchangetradedfunds/07/leveraged-etf.asp
