The New TVIX? Another 2x Leveraged VIX ETF Could Be Coming

David Dierking

If you're one of the folks who was disappointed (or even angry) when the VelocityShares Daily 2x VIX Short-Term ETN (TVIX) got delisted last week, fear not! A replacement product may soon be on the way!

Yes, there are already VIX and short VIX products trading, but TVIX was the only one that offered 2x exposure to the VIX index. While it's technically still available in the OTC market, it's retired from the major exchanges.

One company, however, intends to change that.

VolatilityShares recently filed for the VolatilityShares 2x Long VIX Futures ETF in hopes of filling the gap left open by the $1 billion TVIX. While there will be some differences from TVIX, it would essentially be the identical product.

Screen Shot 2020-07-07 at 4.26.35 PM
source: VolatilityShares

The biggest difference is that the new fund would be organized as an ETF, not an ETN. ETFs trade based on the fund's underlying assets, whereas ETNs are technically debt issues backed by the issuer itself.

VolatilityShares co-founder Stuart Barton also notes that share prices would be calculated based on the settlement prices of the underlying futures contracts, using a time-weighted methodology.

“It’s little changes like that. They sound silly and maybe pedantic, but they make all the difference when you’ve got $2, 3, 4 billion worth to execute when you’ve got three seconds.”

If approved by the SEC, which seems pretty likely, the new fund will likely be met with a lot of investor interest.

TVIX had more than $1 billion in assets at the time of its delisting meaning there was a great deal of underlying demand for a leveraged volatility product. It's difficult to say if the new fund would meet that asset level, but it seems safe to say that it will build an asset base pretty quickly.

VolatilityShares filed for an inverse VIX futures fund as well. No word on when they might get approved.

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