VelocityShares Daily 2x VIX ST ETN (TVIX)

[stingray113]

Well, you're sort of right. Its actually an ETN (EXCHANGE traded note). Means less security than an ETF (exchange traded fund), and most have an automatic termination event clause that closes the fund if a certain price target is met. This already happened with numerous leveraged volatility ETPs this year, and barring yet another reverse split on TVIX it will soon follow. If you can find the shares to short, do so - and quickly. Essentially free money, because in the long term you're absolutely right: This ETP will eventually fail (which it was designed to do), due to the effects of rebalancing (negative roll yield) and the overwheming majority of time that the VIX spends in contango.

The TVIX prospectus can be viewed here: http://www.velocityshares.com/tvix

If you're looking to get into the volatility game, check out SVXY. Its an inverse ETF of the VIX(so no automatic termination). Has options, which offers more flexibility, and allows you to benefit positively from contango as well. Only caution is to consider hedging, either with UVXY (a -2x VIX ETF, but use caution as its negative roll yield make it difficult to long-term hedge) or with protective puts or other options hedge strategies if you prefer avoiding temporary dips in your portfolio balance. In times of steep backwardation such as the "flash crash" earlier this year and even surrounding the election last month it can be subject to temporary severe decreases in price, but will ALWAYS recover, and recover quickly as soon as the VIX returns to contango. So barring a complete market crash I would argue this is the "only" equity worth employing a buy-and-hold strategy with in today's market.

SVXY: http://www.proshares.com/funds/svxy.html
UVXY: http://www.proshares.com/funds/uvxy.html