During recent market observations, people have likely witnessed the Cboe Volatility Index (VIX) creating significant movements that gained the nickname “fear index.” Early March 2025 marked the VIX’s largest climb to almost 28 since August 2024 when calculated from S&P 500 index options that were about to expire. Why the jump? The investment market is disturbed because investors fear tariffs, federal expense reductions, and multiple Wall Street concerns. When the VIX index rises, most market participants start shielding themselves, whereas accomplished traders view it as a chance for volatility trading opportunities.
Grabbing a position in the VIX requires investment through exchange-traded funds (ETFs) and exchange-traded notes (ETNs) linking to the index. Funds that mimic the VIX contain specific risks and technical imperfections because no instrument accurately matches the VIX, and they show time delays when responding to VIX changes. Electing the proper strategy will allow you to navigate this opportunity successfully. We will examine three prominent VIX-linked ETFs that present unique chances, although each has particular drawbacks. Let’s break it down.
Simplify Volatility Premium ETF (SVOL) operates as a steady contrarian approach in volatility management.
The Simplify Volatility Premium ETF (NYSEARCA: SVOL) operates as a fund that works against the VIX operational model. SVOL tracks returns that fall between the two standardized values of -0.2x and -0.3x based on VIX movements. Translation? When the VIX drops—signaling calmer markets—SVOL nudges upward. A sophisticated options strategy, along with its inverse play, protects the SVOL fund against large VIX fluctuations. The Simplify Volatility Premium ETF (NYSEARCA: SVOL) provides market access to investors who need exposure but want to avoid complete market volatility.
Due to its unique, actively managed methodology, SVOL’s annual fees amount to only 0.72%. Investors should not look toward major returns here because it functions as portfolio protection from volatile investments. The stock shows good liquidity levels because its one-month average trading volume reaches 1.5 million shares, thus enabling both entry and exit with ease. SVOL is an appealing option for volatility management since it allows exposure while avoiding total investment.
Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX): The Trader’s Go-To
Jay should invest in the BATS-listed Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) because skilled traders use this instrument frequently. The VXX tracks VIX futures to deliver right-time volatile market data to investors. VXX poses an important drawback since it operates more effectively across brief intervals. Investors who need to keep their assets for more than a day need to know that VXX will trail behind the actual VIX movement—through March 19, 2025, both indexes show a 5% increase, but the VIX has gained 11%. VXX investors face contango, which has continually slowed down their returns since March 19, 2025.
VXX delivers superior benefits to traders who perform frequent transactions in volatility markets. The ETF handles trading volume smoothly thanks to its one-month average volume reaching 9.2 million shares as of March 18. The cost? Users pay 0.89% in expenses for UVIX, and even though this exceeds SVOL’s ratio, they obtain exchange rate flexibility through this arrangement. VXX serves as an instrument for aggressive traders who want to take rapid VIX opportunities, but you should avoid keeping it for the long term.
2x Long VIX Futures ETF (UVIX): The High-Stakes Maverick
The most adventurous traders can use the 2x Long VIX Futures ETF (BATS: UVIX), which provides double the VIX index performance. The fund operates as a VIX version by letting investors achieve double the index’s daily performance through futures contracts. The leverage feature of UVIX means big volatility gains occur but it comes with tremendous risk. Expert traders should take UVIX as a gut check because its volatile nature intersects with future exposure. Before investing in UVIX, anyone should be aware of its high 2.19% expense ratio and risk profile.
Why bother? The maximum exposure needs of traders to find their solution in UVIX, which outperforms calmer ETF offerings. The fund demonstrates high liquidity because it maintains an 8.5 million share one-month average volume, providing traders ample trading flexibility. UVIX provides a more intense experience against market storms than standard VIX funds due to its risk profile. Take a seat regardless of experience level while knowing the consequences.
