Robinhood Accounts Loading Up On Leveraged VIX Futures

David Dierking

Following the activities of Robinhood accounts is almost becoming a sport. It's become perhaps the most popular benchmark for the attitudes and behaviors of the average retail investor.

Looking at what's going on right now, they're a really gutsy bunch!

As I was doing my afternoon stroll through Twitter, I came across this tweet from Bloomberg's Sarah Ponczek.

This may be the greatest case of investors not knowing what they're buying that I've ever seen! Small investors are buying leveraged volatility futures! And let's not forget that this is an ETN, not an ETF, which happens to carry an added layer of risk.

These are exactly the types of products that imploded a little over two years ago when the VIX went from single digits to more than 50 over the course of less than a month.

I'm sure this won't end badly.

I still couldn't quite believe it, so I went to check for myself. Of course, what I found could be charitably described as "not surprising".

Screen Shot 2020-06-11 at 3.13.27 PM

Yep, TVIX was no longer #3 on the list. It had moved up to #1.

This isn't even a case of a large well-known stock being held in hundreds of thousands of accounts making a move. TVIX is only held in around 10% of the number of accounts as the other securities on this list. Yet it's still gained the most new accounts over the past four hours.

I wanted to check the history of TVIX on Robinhood to see if this is just a recent phenomenon or if account holders have always been interested in leveraged VIX futures.


Interest has steadily been growing, but the exposure has never been too large. Not surprisingly, interest in TVIX peaked back in March when the market was melting down, but stabilized since then. Today's spike is an outlier, but I'd fully expect the number of accounts owning this to continue rising as long as volatility levels remain high.

The VIX closed today just above 40, its highest reading since mid-April.

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Comments (12)

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Does Robintrack include option volume, as apart of their popularity ranking? Personally, I made over a 250% return in less than 24 hours on a VXX 35c 6/19... Say what you will about the robinhood traders, but I've yet to find a more accurate gauge of public sentiment regarding the direction of stocks over the past three months... despite the surreal and illogical rationale. Ever read the book "The Wisdom of Crowds"?

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Volatility Fan
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The "products that imploded a little over two years ago when the VIX went from single digits to more than 50" were SVXY and XIV, both of which. move in the exact OPPOSITE direction as the TVIX ETN. Those trading TVIX during the same timeframe actually did quite nicely. And yes, you want to trade TVIX, not invest in TVIX in the traditional sense.


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This article was from noon? So seems like this worked out pretty swimmingly for them. The rich dumb Robinhooders get richer.

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