Second generation volatility ETPs not hamstrung by contango

tango
Volatility ETPs: It takes two to (not) contango

Second generation exchange-traded products (ETPs) sidestep most of the problems of contango and backwardation which marred their first iteration, according to Bart Lijnse, Singapore-based managing director of hedge fund, Nyenburgh.

Contango is the market condition where distant month futures are priced higher than front month futures, which results in the ‘negative-roll' effect when the funds rebalance their futures upon expiration. The opposite market condition to contango is known as backwarda

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