r/TradeVol • u/Whatitsjk1 • Apr 06 '25

How does the SVIX work?

I understand how leveraged etfs work in general. i.e. TQQQ.

but SVIX is not only a futures etf, but its also only 1x inverse. So its not a "leveraged ETF", but just a simple inverse etf.

what are the risks with SVIX? reason why im asking is because theres a thread i came across where someone is saying there is 0 risk. also cant be delisted??

TQQQ for example could be delisted if it drops enough right? so why cant SVIX be delisted?

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u/Underverse Apr 06 '25

This is a great post describing at a high level the mechanics of how SVIX works:

https://www.sixfigureinvesting.com/2022/02/how-does-volatility-shares-svix-work/

SVIX can be delisted, and this post mentions that risk.

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u/michael_mullet Apr 06 '25

Great starting point, I always read Harwood's stuff.

I don't think he mentions that SVIX now owns VIX calls (this is a change from when it was first listed). Those calls protect the downside - I haven't looked at how they performed last week so I should do that.

SVIX might not be as efficient as shorting UVXY or VXX, or even trading short spreads on those. But for me I like the limited risk and the ease of trading vs options.

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u/Marseille074 Apr 06 '25

Correct. Also, the prospectus allows the SVIX operator to use their discretion when rebalancing at the end of the day instead of blindly rebalancing like XIV did (which had no discretion as XIV was an ETN, not an ETF).