UVXY

UVXY is the ProShares Ultra VIX Short-Term Futures ETF (ticker: UVXY). It seeks to provide 1.5 times the daily performance of the S&P 500 VIX Short-Term Futures Index. The fund achieves this by holding VIX futures contracts in the near term, typically front-month and, as needed, second-month maturities, and rebalancing daily to maintain its target exposure. The result is a vehicle designed to respond to changes in near-term market volatility rather than to movements in the VIX spot index itself.

Because UVXY is a daily-leveraged product, its long-term returns reflect compounding effects and the path of volatility. In many market environments, especially where the VIX futures curve is in contango (front-month contracts tradable at a premium relative to longer maturities), the fund can experience a gradual decline over time even if volatility spikes intermittently. Conversely, during periods of rapid volatility shifts, UVXY can produce sharp gains in short bursts. These dynamics make the fund appropriate for short-term trading or hedging rather than a buy-and-hold strategy.

Trading and fees: UVXY trades on the NYSE Arca and tends to have high liquidity relative to other volatility products, though spreads can widen in stressed markets. The expense ratio is about 0.95% per year. Investors should be aware of the fund’s leverage, daily rebalancing, and complex futures mechanics, which can yield significant losses in adverse conditions.

History: UVXY was introduced by ProShares in 2011 as part of a family of volatility-focused exchange-traded products.

See also: VIX, VIX futures, volatility ETFs.