iPath S&P 500 VIX Short Term Futures ETN (NYSE:VXX) provides exposure to equity market volatility through CBOE "Volatility Index" futures.  Investors are busy trying to figure out where the market is headed and taking positions both long and short, while the underlying fear is we are headed for a correction, the VXX makes perfect sense.

A direct investment in VIX (commonly referred to as spot VIX) is not possible. The S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) holds VIX futures contracts, which could involve roll costs and exhibit different risk and return characteristics.

Investments offering volatility exposure can have various uses within a portfolio including hedging, directional, or arbitrage strategies and are typically short or medium-term in nature.

The VXX is trading near its 52-week low, Friday it closed at $22.37 and over the past 12 months ranged from $21.78 to $118.99 (see chart below).

WHERE ARE WE HEADED?
Tom Petruno from the LA Times said it best this week:
Despite signs of continuing recovery, the pessimistic case on the economy is straightforward: Take away the trillions of dollars in help provided by the government and the Fed, the bears say, and there would be no sustainable recovery.

A big test of that thesis looms. The Fed, which has been regularly buying mortgage-backed bonds for the last year in an attempt to keep home loan rates down, will halt that program on March 31. If mortgage rates rise enough to slam the housing market, that will reinforce the belief that the recovery has been a mirage.

As of March 19th there were 52 million shares outstanding of the VXX with an incredible market cap of $1.7 billion.  Take a gander at the iPath prospectus for the VXX this weekend - click to read.  Note that the VXX was this week's big decliner, based mostly on a volatile Friday session with shares down 7.0% for the week. 

Place your bets investors, when the crowd moves, it will move fast and building a position in the VXX could provide a hedge for hasty traders.

Other recent VXX articles from around the web worth your time and attention:

The Reality of VXX Volume (Minyanville.com - 3/12) 

Trader Insight! Understanding The Markets and the Next Move! (Inthemoneystocks.com (blog) -3/12)

The Perfect Hedge for a Risky Era? (Smartmoney.com - 3/10)

(No positions in any of the securities mentioned in this publication)

STATS ON THE VXX