Long-Vol Product
An investment product designed to gain value when volatility rises -- typically structured as a long position in VIX futures, a portfolio of long-OTM options, or a variance swap. Common retail-facing forms include long-VIX exchange-traded products and tail-risk hedge funds. The structural challenge for any long-vol product is the carry cost: holding long-vol exposure during calm regimes typically costs money each day (negative roll yield, theta decay, or both), so the strategy needs occasional volatility spikes to outperform and frequently loses money over multi-year periods even when individual spikes are correctly captured.
Lessons that use this term
Related terms
American Option · Asian Option · Barrier Option · Basket Option · Butterfly Spread · Calendar Spread
Open this term in the app → — no account needed; browse the full glossary while you research.