Why This Popular Volatility-Focused ETN Is Seeing High Interest From Retail Investors Today

iPath Series B S&P 500 VIX Short-Term Futures ETN VXX is seeing the highest interest on Reddit’s r/WallStreetBets forum as of early Wednesday.

What Happened: The exchange-traded note topped the discussions on the forum with 484 mentions, followed by SPDR S&P 500ETF Trust SPY and GameStop Corp. GME with 406 mentions and 217 mentions, respectively, data from Quiver Quantitative showed.

The ETN is also trending in the third spot on Stocktwits.

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Why It Matters: ETNs are a type of unsecured debt securities that track an underlying index of securities and trade on a major exchange like a stock. They are similar to bonds but do not have interest payments.

The VXX, which closely tracks the Chicago Board Options Exchange (CBOE) Volatility Index or VIX, is a popular way for investors to trade stock market volatility.

Barclays PLC BCS said Monday it would be suspending the sale and issuance of two ETNs — including the VXX ETN — due to capacity constraints.

With no new shares being issued, the price of VXX has become untethered from the value of the underlying asset. Short sellers will also find it difficult to buy new shares to close their bearish positions in VXX.

Price Action: VXX closed 0.4% lower in Tuesday’s regular trading session at $28.70, but rose 4.9% in the after-hours session to $30.11.

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