Before you get too excited about a new volatility product, let me explain that the two new ETN’s – short-term volatility (VXXB) and intermediate-term volatility (VXZB) are merely the eventual replacements for VXX and VXZ. The latter two (VXX and VXZ) have a maturity date of January 30, 2019 – ten years after they were introduced. These two new issues will replace them. So, for now, the new issues are trading with a “B” at the end of their symbol. When VXX and VXZ mature in about one year, these two new ones will remove the “B” from their symbol and will trade as usual. So, in reality, this is not a new product – it’s just the replacement of something that’s going to mature next year, with similar ETN’s maturing another ten years later.
This article was featured in the 1/26/2017 edition of The Option Strategist Newsletter.