Three Top Ways to Trade Boiling Tensions with China

Tensions are boiling between the U.S. and China.

Just this morning, China said it plans to sanction Lockheed Martin (LMT) over its role in a $620 million U.S. arms deal with Taiwan.  

“China firmly opposes U.S. arms sales to Taiwan,” said Chinese Foreign Ministry spokesman Zhao Lijian, as quoted by The Wall Street Journal.  “In order to safeguard national interests, China has decided to undertake necessary measures and impose sanctions on the main contractor for this sale, Lockheed Martin.”

Along with this, China and the U.S. have been trading blow over trade, technology, human rights, and territorial claims in the South China Sea.  It also follows news a potential Phase 2 trade deal has been “severely damaged.”

As tensions boil over, investors are investing in safe havens, like gold, and are just beginning to push back into volatility trade opportunities, including:

ProShares Ultra VIX Short-Term Futures ETF (UVXY)

The ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index. 

VelocityShares Daily 2x VIX Short-Term ETN (TVIX)

The TVIX is another great way to trade elevated volatility.  This ETF  tracks an index of futures contracts on the S&P 500 VIX Short-Term Futures Index.

iPath S&P 500 VIX Short-Term Futures (VXX)

The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index Total Return.  As volatility shoots higher, so does the VXX.