Compare the best VIX ETFs

Thinking the stock market is about to get more volatile? This page explains the pros and cons of investing in an index and compares the best VIX ETFs.
By: Harry Atkins
Harry Atkins
Harry joined us in 2019, drawing on more than a decade writing, editing and managing high-profile content for blue… read more.
Updated: Jun 25, 2021
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Exchange-traded funds (ETFs) are becoming an increasingly popular way to invest in conventional stock indices, as well as a volatility index such as the VIX. This page will help you learn the best strategies for investing in it.

Best VIX ETFs

While the VIX isn’t as commonly traded as a benchmark stock index like the S&P 500, there are still multiple options to choose from. We profile the best ones in the table below. Some of the most prominent around today include:

#ETF nameGet started
1ProShares VIX Short-Term Futures ETF (VIXY)Invest now >
2ProShares VIX Mid-Term Futures ETF (VIXM)Invest now >
3iPath Series B S&P 500 VIX Short-Term Futures (VXX)Invest now >
4VelocityShares Daily Long VIX Short-Term (VIIX)Invest now >
5iPath Series B S&P 500 VIX Mid-Term Futures (VXZ)Invest now >
List selected by our team of analysts, updated 26th May 2020.

Brokers offering VIX ETFs

Multiple different online brokers offer ETFs, so you’ll need to pick one that works best for your specific investing needs. You can find a broker quickly and easily by simply selecting one from the table below:

1
Min. Deposit
$50
Promotion
User Score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$1
Promotion
User Score
9.3
0 Commissions and no deposit minimums
Registered with and regulated by SEC and FINRA
Loss of cash protection
Start Trading
Description:
Financial company driven by technology and offering all-in-one self-directed investment platform that provides excellent user experience.
Payment Methods
Full regulations list:

What is a VIX ETF?

A VIX ETF is an exchange-traded fund that tracks the movement of the VIX, going up or down based on levels of market volatility. The VIX itself is the Chicago Board Options Exchange’s CBOE Volatility Index, and is sometimes referred to as the ‘fear index’. It is a popular measure of the stock market’s expectation of volatility and works by tracking the performance of the S&P 500 index. 

The ProShares VIX Short-Term Futures ETF (VIXY) and ProShares VIX Mid-Term Futures ETF (VIXM) are two of the most popular ones that can be traded today.

Is it a good investment?

ETFs are a more complex investment than a typical stock market index, because you’re betting on expected market volatility rather than simply trying to invest in an index you feel will rise in value. That said, if you invested in the VIX in, say, mid-February 2020 and sold a month later, you would have made a very large profit, due to fears over the economic impact of COVID-19 causing market chaos.

There’s still plenty of risk involved in buying into an ETF, though. For instance, if you thought that massive job losses caused by COVID-19 would trigger one continuous spike in market volatility, you would have been proven wrong, as the VIX has pulled back sharply since its March 2020 peak.

How do I trade VIX index ETFs?

We already covered how buying an ETF can require more study than buying, say, an S&P 500 ETF. If you’re fine with the more complex nature of the VIX, here are three factors to review before making your ETF purchase:

  1. How to choose an ETF
  2. How to choose a broker 
  3. Use our top tips to succeed

1. How to choose an ETF

Here’s a look at some more factors to consider when deciding on a VIX ETF to buy:

  • Total value of assets. The higher the total value of assets in an ETF, the better its liquidity will be, and the tighter its price spreads will be. These are both positives for investors. Lower liquidity means you’ll be taking on more risk and possibly more costs.
  • Charges and fees. ETFs charge significantly lower fees than index funds, making them a better bang for your buck. ETFs are also easier to trade than index funds, since you can trade them in real time, as you would a stock. However, there will still be fees applicable, so ensure these are of a reasonable level before you start.
  • Daily trading volume. The higher the daily volume, the better. Higher volume levels tend to produce more stability and less frequent wild price swings. 
  • Performance over time. Look for an ETF with a strong track record, as that’s a good indicator of how well it will likely perform in the future.
  • Liquidity. The more liquidity, the more interest it will attract, and the more stable its price action is likely to be.
  • Location and tax status. An ETF’s tax status can sometimes change based on the country in which it’s based. If you’re deciding between two with similar track records and one of them is based in a lower-tax country, that could be your better bet.
  • Leverage. Trading with leverage means you’re putting down a small percentage of the total trade, with your broker covering the rest. Trading with leverage means bigger gains than non-leveraged trades when you guess right but also bigger losses than non-leveraged trades when you’re wrong. That makes it a strategy that’s generally best suited for more experienced investors.

2. How to choose a broker

If you want to trade ETFs, then you’ll need to find a broker that can facilitate these trades. There are a wide variety of different online trading platforms from which you can choose, so we’ve compiled this list of what you want to look out for when selecting the right broker for you. 

  • What services they offer. The first step you need to check is that the broker you have selected offers ETF trading, and whether – if so – you’ll be able to use the platform to buy and trade VIX ETFs. Beyond this you might want to check other trading options the broker offers, such as how much leverage you can trade with.
  • Whether the platform offers a demo account. If you’re new to ETF trading, then it’s wise to start off with a demo account. These are offered by many brokers and allow you to place trades without risking any of your capital. You won’t make any money with a demo account, but using one to learn the ropes can prevent losses later on.
  • The fees charged. Trading ETFs often incurs fees, and these will vary from broker to broker. Sometimes there’ll be a flat rate for making trades, and sometimes brokers will charge commission. Check out the fees charged by a broker before signing up to their service.
  • Financial limits. Brokers will often apply a variety of limits to users’ trading activities. This can include deposit/withdrawal minimums and maximums or daily ETF trading limits. Make sure you pick a provider that can cater to the level of trading you’re looking to be doing.
  • Security features and regulation. When investing your money with a platform, you want to ensure that it is reputable, complies with relevant legislation, and has good online security features. You can find reliable brokers by looking through our reviews, or simply follow the links to brokers that are listed on this page.

3. Use our top tips before investing

Before investing, make sure you have a sound investing plan. Follow these steps to build that plan:

  • Do your research. Study the top ETFs, which we reviewed earlier. Compare each one to your own specific investing goals before deciding which one to choose.
  • Set a budget. Setting a budget ensures that you have plenty of money left over for future trades, even if your first attempt at buying one goes wrong. Most importantly, you should never invest more than you can afford to lose.
  • Select the right platform. Choose an online broker based on the size of its transaction fees, ease of use, track record, and strength of reputation. We have comprehensively reviewed all your best options to help you make the best decision.
  • Grow your investments over time. As a beginner investor, consider starting small. You can always raise the size of your investments as you get better with time.
  • Think long-term. The best VIX ETFs are much more conducive to short-term trading than a typical stock index like the S&P 500, because it’s more volatile. So when we say think long-term, in this case we’re advising that you consider making the VIX part of a larger portfolio, while looking for different investment assets to trade for potential longer-term gains.
1
Min. Deposit
$50
Promotion
User Score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.

What should I do now? 

Choose an ETF broker that’s right for you, punch in the ticker symbol, and click Buy. Congratulations, you’ve invested in the VIX ETF.

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Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Harry Atkins
Financial Writer
Harry joined us in 2019, drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience in the… read more.