what is uvxy stock — complete guide

This guide answers what is uvxy stock, explaining UVXY’s purpose, mechanics, risks, fees, tax and trading considerations for traders and hedgers, and where to check live data and trade via Bitget.

2025-09-24 09:57:00

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ProShares Ultra VIX Short-Term Futures ETF (UVXY)

what is uvxy stock — a concise answer up front: what is uvxy stock? It is a leveraged exchange-traded fund (ETF) that seeks daily investment results equal to approximately 1.5x the daily performance of the S&P 500 VIX Short‑Term Futures Index. Designed to provide short‑term exposure to equity‑market volatility, UVXY is commonly used by traders for tactical bets or hedges rather than as a buy‑and‑hold "stock" investment.

This article explains what is uvxy stock in detail, covering issuer, structure, investment strategy, daily‑reset mechanics, term‑structure effects (contango/backwardation), risks, fees, taxation, historical notes, trading considerations and where to find up‑to‑date information. By the end you will understand why UVXY can spike dramatically during stress and why long‑term holders often see persistent decay.

Overview

ProShares is the issuer of the fund traded under the ticker UVXY. The fund’s stated objective is to provide daily investment results that correspond to 1.5x the daily performance of the S&P 500 VIX Short‑Term Futures Index. UVXY launched on October 3, 2011 and the fund’s expense ratio is approximately 0.95% (check the current prospectus for exact current figures). UVXY is structured to provide leveraged exposure to short‑term VIX futures rather than to the VIX index itself.

As of June 30, 2024, per ProShares filings and ETF data providers, UVXY’s assets under management and daily trading volumes have varied with market conditions; investors should check the issuer’s site or updated ETF data platforms for live AUM and volume figures before trading. This overview prepares you to dive into how UVXY attempts to achieve its objective and why its characteristics differ sharply from conventional equity ETFs.

Investment objective and strategy

UVXY seeks to deliver approximately 1.5x the daily return of the S&P 500 VIX Short‑Term Futures Index. That index is constructed from first‑month and second‑month VIX futures contracts, blended to maintain a weighted average maturity roughly near one month. The fund gains exposure by holding VIX futures contracts and may use swaps and other derivatives to attain its leveraged exposure.

Because UVXY targets a fixed multiple of the daily return of a futures‑based index, its performance is driven by two main components:

The daily movement in the S&P 500 VIX Short‑Term Futures Index (derived from changes in front‑month and second‑month VIX futures prices).
The impact of rolling futures contracts forward (the roll process) and the strip’s term structure (contango vs. backwardation).

The fund implements leverage to deliver roughly 1.5x of the daily index return. Leverage is reset daily (see next section), and the fund uses cash or short‑term Treasury instruments as collateral against futures and derivatives positions.

Leveraged, daily-reset mechanics

A defining feature of UVXY is its daily reset. UVXY is designed to achieve approximately 1.5x the index’s return on a single trading day. This means:

what is uvxy stock for a single trading day: an instrument that amplifies the daily percentage change in the index by approximately 1.5x.
what is uvxy stock over multiple days: not a straightforward 1.5x of the multi‑day return because of daily compounding and volatility.

Daily resetting produces compounding effects. If the underlying index has a series of alternating moves, compounding can materially change cumulative returns relative to simply multiplying the long‑term return by 1.5. In volatile sideways markets, the fund can experience erosion due to volatility decay: losses on volatile oscillations reduce NAV over time, even if the index ends close to its start value. Conversely, in a strong trending period (sustained moves up or down), compounding can increase gains (or losses) beyond simple multiplication.

This daily reset behavior is why what is uvxy stock for a trader is often a short‑term tactical tool rather than a long‑term investment. Holding UVXY for more than a day exposes an investor to compounding effects that make long‑term performance unpredictable and often unfavorable for buy‑and‑hold strategies.

Futures roll and term-structure effects

Because UVXY obtains exposure via VIX futures, the fund’s performance depends heavily on the futures term structure. Two common scenarios are:

Contango: Longer‑dated VIX futures trade at higher prices than nearer contracts. Rolling from near‑term to longer‑term contracts in contango typically produces negative roll yield, which erodes returns over time. Contango is common in calm markets and is a key reason UVXY can decay.
Backwardation: Near‑term futures trade above longer‑dated futures. Rolling in backwardation can generate positive roll yield and boost returns during stress periods when implied volatility spikes.

Effectively, the roll yield from repeatedly selling the expiring front‑month contract and buying the next month can cause persistent negative drag during contango, contributing to long‑term decline in NAV for long holders. When answering what is uvxy stock for investors, it is essential to highlight that futures roll effects are a structural performance driver distinct from the underlying VIX index.

Fund structure and taxation

UVXY is managed by ProShare Advisors and is implemented using a commodity pool wrapper (it operates as a fund that holds futures and derivatives). Because it uses futures and swaps, tax reporting historically has been more complex than simple equity ETFs. Investors should check the latest prospectus or the fund’s regulatory filings for current tax reporting details. Historically, similar funds sometimes issued Schedule K‑1s to certain investors, though many issuers have moved to simplified 1099 reporting; always confirm the current tax document type in the fund’s documentation.

Tax treatment depends on jurisdiction and the fund’s operational choices. For U.S. taxable investors, gains from futures and derivatives can be taxed under specific rules (e.g., 60/40 mix treatment for futures under Section 1256 in the U.S.), while ordinary short‑term gains from frequent trading may be taxed at higher rates. Because tax rules change, consult the prospectus and a qualified tax professional before trading.

Performance characteristics

Historically, UVXY exhibits two contrasting behaviors:

High short‑term responsiveness: During rapid market selloffs or volatility spikes, UVXY can produce very large positive returns intraday or over a few days. Traders who correctly time volatility spikes can experience substantial gains.
Persistent long‑term decay: Over months and years, UVXY has tended to deliver negative returns for buy‑and‑hold investors due to daily leverage effects, futures roll losses in contango, and the expense ratio.

As a result, performance for UVXY is often characterized by extreme volatility and path‑dependent returns. Answering what is uvxy stock therefore requires emphasizing that the fund's design favors short‑term tactical use rather than passive investment.

Uses and typical investors

Practical uses of UVXY include:

Short‑term tactical volatility bets: Traders can buy UVXY to profit from expected short‑term increases in market volatility.
Short‑term hedging: Some equity holders use UVXY as a hedge against sudden equity market declines, since UVXY typically spikes when implied volatility rises.
Intraday trading and pairs strategies: Because of high liquidity (on many days) and option availability, active traders sometimes use UVXY in pairs trades or volatility arbitrage.

Typical investors in UVXY are knowledgeable, active traders who monitor exposure closely, size positions conservatively, and often use stop‑loss rules. UVXY is not designed for passive investors seeking buy‑and‑hold equity exposure.

what is uvxy stock to a retail investor? It’s a high‑risk, high‑volatility ETF intended for short‑term use, requiring discipline, risk controls and frequent monitoring.

Risks

Major risks associated with UVXY include:

Volatility decay: Daily resets and compounding can erode value in choppy markets.
Leverage risk: The 1.5x target amplifies daily moves, increasing potential losses and gains.
Futures roll/contango losses: Negative roll yield in contango environments causes long‑term drag.
Tracking error: Because UVXY tracks a futures‑based index and uses derivatives, actual returns can diverge from the VIX index or the theoretical multiple.
High beta and tail risk: Large, rapid moves can produce outsized losses or gains.
Liquidity risk: Though UVXY is often liquid, liquidity can evaporate during stress, widening bid‑ask spreads and increasing execution costs.
Expense ratio: Ongoing fees (≈0.95%) reduce returns over time.
Counterparty and operational risk: Use of swaps or derivatives introduces counterparty exposure and operational complexity.

Plainly put, UVXY can move dramatically in short periods and is subject to structural decay that makes long‑term holding risky for most retail investors.

Fees, liquidity, and holdings

The fund’s expense ratio is approximately 0.95% (verify in the current prospectus). UVXY typically holds a mix of short‑term VIX futures contracts (front‑month and second‑month) and cash or short‑term Treasury instruments as collateral. The exact holdings and weighted maturities change daily with rebalancing and roll activity; consult the daily holdings report from the issuer for up‑to‑date positions.

Assets under management (AUM) and average daily volume fluctuate with market conditions and investor flows. As of June 30, 2024, ProShares and public ETF data platforms reported that UVXY’s AUM was in the range of approximately $1.2 billion and average daily volume was in the tens of millions of shares, though these figures can change rapidly—check current data before trading.

When trading, be mindful of intraday spreads and the potential for wider spreads during market stress. Always check NAV, bid/ask spreads, and recent volume as part of pre‑trade due diligence.

Historical notes and product changes

UVXY was launched on October 3, 2011. A significant product change occurred in 2018 when the fund’s leverage target was changed from 2x to 1.5x the daily return of its benchmark index (this adjustment was part of a broader industry shift to reduce extreme daily leverage for certain volatility products). Since inception, UVXY has experienced several high‑profile spikes during market stress events—for example, volatility surges in 2015, 2018, early 2020 (COVID‑19 market crash), and other localized selloffs produced rapid, large positive returns in short windows.

These historical spikes underscore UVXY’s ability to produce outsized short‑term gains but they also highlight how long‑term buy‑and‑hold investors can suffer persistent losses between those spikes due to decay.

Related products and alternatives

There are several related volatility instruments with different structures and objectives. Examples include unleveraged long VIX futures ETFs/ETNs, short/ inverse VIX products, and other leveraged VIX products with different multiples. Key differences to consider:

ETF vs ETN structure: ETFs hold assets (futures, cash), while ETNs are unsecured debt obligations with issuer credit risk. Structure affects credit exposure and sometimes tax reporting.
Leverage multiple: Different products target different daily multiples (e.g., 1x, -1x, 2x, etc.). Higher multiples increase path dependence and decay risk.
Inverse products: Designed to gain when volatility falls; they carry their own decay mechanics.

When comparing what is uvxy stock to alternatives, note that UVXY’s 1.5x daily leverage and futures‑based exposure make it distinct from simple VIX index tracking or plain‑vanilla equity ETFs. Investors should compare objectives, structure, fees and tax treatment across alternatives.

How to trade UVXY

Practical trading considerations:

Brokerage availability: UVXY is listed on U.S. exchanges and is commonly available through major brokerages. For traders using Bitget, check Bitget’s platform for quoting, derivatives, or relevant ETF trading services where available.
Intraday characteristics: UVXY often has high intraday volatility and volume; use limit orders to control execution price and be mindful of spreads.
Options: Options availability varies; check your broker or platform for listed options on UVXY before planning an options strategy.
Order types: Use limit orders, stop‑loss orders and position limits to manage risk; market orders can execute at unfavorable prices during volatile periods.
Position sizing: Because of leverage and volatility, allocate a small percentage of portfolio capital to any single UVXY position and plan exit rules.

Remember, UVXY is intended for short‑term tactical use. Clearly define the timeframe, risk tolerance and exit criteria before trading.

Regulatory and disclosure considerations

Before trading, review the fund prospectus, fact sheet and regulatory filings for the most current information on objective, risks, fees, tax treatment and operational structure. These documents provide authoritative details about daily targets, fees, holdings and legal structure. Also review any updated disclosures from the issuer regarding changes to leverage, trading mechanisms or tax reporting.

As of June 30, 2024, investors should consult ProShares’ product page and the fund prospectus for the latest operational and tax reporting details.