Markets are falling apart.
All after Russia’s Gazprom said its key gas pipeline to Europe will remain closed.
With that, the region could be susceptible to blackouts, potential rationing, and a severe recession. All after G7 finance ministers agreed to impose a price cap on Russian oil exports to limit funding for Russia’s war in the Ukraine.
“Moscow has blamed sanctions imposed by the West after Russia invaded Ukraine for hampering routine operations and maintenance for Nord Stream 1. However, Brussels has said that is a pretext and Russia is using gas as an economic weapon to retaliate,” says Sky News.
As a result, markets were hammered on the news.
The Dow Jones is now down 226 points. The NASDAQ is down 117, as the S&P 500 sinks 29.
If the situation gets worse, and Europe is plunged into a deep recession, markets could sink more. And volatility could explode higher. Should that happen, investors may want to consider volatility ETFs and ETNs as a hedge against long positions.
Some potential opportunities, 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.
iPath S&P 500 VIX Short-Term Futures (VXX) – The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index.
ProShares VIX Short-Term Futures ETF (VIXY) – ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.