VIX ETFs Updated: Double Volatility or Short the Fear?
Published Date: 5/9/2025
Notice
Summary
Cboe BZX Exchange wants to update some details about two special ETFs: UVIX, which aims to double the gains of VIX futures, and SVIX, which tries to do the opposite. These changes tweak the original rules to keep everything clear and accurate for investors. If you trade or watch these ETFs, keep an eye out as the SEC reviews the updates and invites public comments soon.
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
Removal of 10% VIX Futures Cap
The Exchange proposes to remove or modify the rule language that limited each Fund's participation in VIX futures to no more than 10% of VIX futures traded on the Cboe Futures Exchange during any "Rebalance Period," which the orders defined as any 15-minute period of continuous market trading. The change is meant to allow the UVIX and SVIX funds (sponsored by Volatility Shares LLC) to compete more easily with other VIX products that were not subject to the 10% participation restriction.
Sponsor Uses Averaged Valuation to Reduce Market Impact
The Sponsor states its products mitigate market impact by using a valuation method that averages prices over a longer time period instead of only using the 4:00 p.m. ET settlement price. The Exchange highlights this as an example of how the Sponsor seeks to minimize the Funds' market impact when operating without the previously described caps.
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