Presenter:  Christine Dieckmann Bangsgaard, AU

Title: Retail investors, VIX ETPs, and product confusion

Abstract: Despite the high level of product complexity, VIX exchange-traded products (VIX ETPs) have become popular among retail investors raising concerns whether this group of investors understands the products and benefits from them. I find that retail investors lose money and display poor selection and market timing when trading VIX ETPs. Patterns in retail investors’ trading indicate the mistaken belief that VIX ETPs can be used to trade the VIX index and shed light on product confusion as a possible explanation of retail investors’ investment performance under financial innovation or complex financial products.

Organizers: Stefan Hirth and Anders Merrild Posselt