January 15, 2021
Market activity in 2020 and the VIX price action that resulted from increased market uncertainty resulted in several active money managers maintaining or adding to short volatility positions using VIX futures contracts. The excess volatility that the market experience in 2020 created a short opportunity and unlike previous instances where VIX moved quickly to higher levels, hedge funds maintained their consistent short position with several seeing inflows. Due to the absences of a short VIX ETF smaller investors are prohibited from the same opportunity to benefit from a short volatility position that exists for hedge fund that are not available to all investors.
The SEC should take action that allows the issuance of the -1x Short VIX Futures ETF. Without this product being available to all investors institutions and qualified investors for hedge funds have the opportunity to invest in a strategy that excludes all individual investors.