Short VIX ETPs Represent More Than 100% Of VIX Futures

Even though the size of inverse and levered VIX ETPs is small in the context of the broader US equity market, the growth of these products has become "worrisome" as they have come to dominate the market according to Goldman Sachs derivatives analyst Rocky Fishman.

In a research note published earlier this week, Fishman noted that although VIX ETPs only have around $5 billion in assets under management today, they dominate a disproportionate amount of the market. According to Goldman's analysis, the XIV (Credit Suisse AG - VelocityShares Daily Inverse VIX Short Term ETN) and SVXY (ProShares Trust II) short VIX products alone "represent over 40% of the open interest of first two month VIX futures, and the gross size of VIX ETPs tracking the first two VIX futures...