There are times when day trading volatility exchange-traded funds (ETFs) is very attractive, and times when volatility ETFs should be left alone. Tradijg like the market indexes, trends also develop in the volatility ETFs. Often the author will at least know that these products trade based on the VIX futures. While it looks promising, once it is applied to historical data it does not deliver positive results.
Also, many of these etfs have structural issues that cause them to consistently underperform the instrument they claim to track -- see USO and UNG for examples.But there are some advantages with trading leveraged options. Unless there is a strong trend in price and volatlity, it is very difficult for these instruments to outperform in the intermediate term. As with equities and indexes, there are many ETFs that list options. And while there are many derivative strategies to utilize in conjunction with ETFs, here are optjons basic ways to utilize options.