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For investors seeking momentum, iPath Series B S&P 500 VIX Short-Term Futures ETN VXX is probably on the radar now. The product just hit a 52-week high and is up about 213.1% from its 52-week low price of $13.15/share.
But are more gains in store for this product? Let’s take a quick look at the product and the near-term outlook on it to get a better idea on where it might be headed:
VXX in Focus
The underlying S&P 500 VIX Short-Term Futures Index Total Return offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the Index. The product charges 89 bps in fees (see all volatility ETFs here).
Why the Move?
The volatility corner of the market has been an area to watch lately as stocks plunged massively. Crude oil prices plunged 25% after the world's key producing countries failed to reach an output cut deal. This triggered global growth worries and sent global markets into a tailspin. No wonder, volatility has risen in the market.
More Gains Ahead?
The product has a positive weighted alpha of 5.70, which gives cues of further rally.
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