Two Hot Reasons to Hedge for Volatility in 2020

The threat of war is back.

In a series of tweets, President Trump said Iran “will pay a very BIG PRICE” after protesters attacked the U.S. embassy in Baghdad, demanding that American troops withdraw.  All after U.S. strikes against Tehran-backed Kataib Hezbollah killed at least 25 people.

While they dispersed, tensions are boiling over with Iran over this situation.

However, Iran isn’t taking threats seriously.  

“The Iranian government, the Iranian nation, and I strongly condemn the US’s malice,” said Iran’s Ayatollah Khamenei, as quoted by Newsweek. “That guy has tweeted that we see Iran responsible for the events in Baghdad and we will respond to Iran.”

Firstly, you can’t do anything and secondly, if you were logical—which you’re not—you’d see that your crimes in Iraq, Afghanistan… have made nations hate you,” he added.

We May also See the Return of Rocket Man

North Korea’s Kim Jong Un said he was no longer bound by his “pledge to halt major missile tests and would soon debut a ‘new strategic weapon,’” as highlighted by Bloomberg.  “The world will witness a new strategic weapon to be possessed by the DPRK in the near future.”

Following that news, former National Security Adviser John Bolton tweeted the U.S. should “fully resume” military exercises with South Korea in response to Kim’s threat.

Along with trade tensions, coming U.S. elections, and further impeachment chaos likely, 2020 could be an extremely volatile year.  If that’s the case, some of the best stocks to watch include:

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 500VIX 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.