PSA: UVXY isn't a heavily shorted company like GME

I've noticed quite a few posts that would indicate a lot of folks think UVXY is a heavily shorted company like GME. I'd like to clear that up in order to hopefully help prevent novice investors from losing money.

UVXY is an ETF (exchange traded fund) not a company. These funds are similar to mutual funds except for the fact that they're traded on exchanges, much like stocks and options. UVXY is a product offered by ProShares that seeks leveraged daily exposure to the S&P 500's VIX (volatility index). The VIX is an instrument that is used to measure volatility. Generally, volatility occurs when markets are looking bearish, or during periods of uncertainty. When these events occur, VIX and UVXY go up.

Is trading UVXY a bad idea?

No and yes. You can certainly make money buy holding UVXY when you believe we're in bearish territory, but overall UVXY loses value by design. Because of this, you can take short positions and hope that markets stay bullish.

How is UVXY valued?

That question is outside the scope of this post, but you can find a wealth of information on the ProShares website. Make sure to view the prospectus (the document that defines what the product is) and the daily holding sheet.