The stock market, for lack of a better term is a gamble. It can go up, down, sideways, backwards, and even 4 dimensional, (just kidding). But seriously, the market is almost always largely unpredictable. There are an unlimited amount of factors that can influence the markets in an unlimited amount of ways, and even the best bankers and traders cannot account for them all. This is why the smartest people have created alternatives to just simply buying and selling stocks. See, the smartest bankers and traders don’t just play the market when it is up or down; rather they play on both ends of the spectrum and at the same points in time.

XIV is a short term Exchange Traded Note that works off of the volatility of the S&P 500 index. Essentially, the XIV is a measure of how eager people are willing to buy and sell within the S&P 500 market. When XIV is high, this means that the volatility of the S&P 500 is down. So on the contrary, when volatility in the markets is high, the XIV is down. You should look to get involved with XIV when you expect a tranquil market.

If you want to learn more, click here.