Profit from Fear: VXX

What's driving the market these days?  Headlines, but most of all -- Fear.  The best article of the day can be found from StreetAuthority.com with its recap on why the iPath S&P 500 VIX Short Term F (NYSE:VXX) is the play for hedging your portfolio.

(StreetAuthority.com) Will it ever end? It seems like one day the Dow Jones Industrial Average swings up +200 points and then gaps down -300 points the next. Several weeks of that is enough to make most investors nauseous.

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But a simple change in attitude can fix all of that.

You've heard the adage "be greedy when others are fearful." There's a way to do just that.

But first, let's take a look at just exactly how fearful investors really are. We do this by looking at the Volatility Index (VIX), also known as the "Fear Index."

The Volatility Index is based on data collected by the Chicago Board Options Exchange. Each day, the CBOE calculates a number based on prices paid for puts and calls for the S&P 500. This number gives traders an idea of the implied volatility in the market for 30 days.

A VIX reading above 30 generally means the market is relatively volatile and investors are fearful, while anything below 20 implies a period of low volatility and a calm sentiment among investors. Keep in mind that the index is a contrarian sentiment indicator. If either of these levels is breached, traders look for a turnaround in the market.

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SOURCE: http://streetauthority.com/a/easiest-way-profit-fear-456204