VIX, Wall Street's Fear Gauge, Is Skyrocketing—How To Trade It - State Street SPDR S&P 500 ETF Trust (ARCA:SPY), ProShares Ultra VIX Short Term Futures ETF (BATS:UVXY), VIX Short-Term Futures ETF (BAT

Core Insights - The VIX, known as Wall Street's fear gauge, has surged approximately 30% during morning trading, indicating increased market volatility and heightened anxiety among traders [1] - A jump of 20% to 30% in the Cboe VIX signals that traders are actively seeking protection against rising near-term risks for the S&P 500 [1] Volatility Trading Strategies - Many active traders prefer to use exchange-traded products that track VIX futures instead of trading VIX futures directly to express their views on market fear [2] - The VIX is derived from S&P 500 options and reflects the market's expectation of 30-day implied volatility, typically rising during equity drawdowns [3] - The VIX Short-Term Futures ETF (BATS:VIXY) provides unlevered 1x long exposure to a basket of front-month VIX futures, suitable for short-term trades rather than long-term holding [4] - For traders seeking higher returns, the ProShares Ultra VIX Short-Term Futures ETF (BATS:UVXY) targets 1.5x the daily move of the same short-term VIX futures index, but its performance can diverge significantly from the expected multiple due to leverage and market conditions [5] - The structure of UVXY can lead to aggressive decay in calm markets, making it more appropriate as a short-term trading vehicle rather than a core portfolio position [6]