One Trade that's Working - Volatility via the VXX

iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) is the fund that has been working, more so than gold.  The VXX is up an incredible 109% in the last 30 days while the Dow Jones has plunged 13.6%.  Volatility, its what's for dinner.

WallStNation.com Sponsors - Become one Today

The Volatility Index (VIX), also known as the "Fear Index" is pushing at an all-time high.  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 direct investment in VIX (commonly referred to as spot VIX) is not possible. The S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) holds VIX futures contracts, which could involve roll costs and exhibit different risk and return characteristics.

Bottom line: Fear in the market equates to gains in the VXX.

Traders have been piling into the VXX in the past few weeks and the payoff has been massive.  Just take a gander at the chart below.