CBOE VIX Volatility Index extends gains, hitting two-month highs.
The CBOE VIX (NYSEARCA:VXX) surged on Friday, extending the previous day’s massive spike as share prices resumed their sell-off.
The Chicago Board Options Exchange (CBOE) Volatility Index peaked at 16.85 on Friday, its highest in over two months. The so-called “fear index” settled at 15.10, having gained 6.2%. Back-to-back-gains in the VIX have catapulted the relative strength index (RSI) into the high 60s.
In stocks, the large-cap S&P 500 Index (NYSEARCA:SPY) fell 0.6% on Friday.
Major VIX ETFs:
iPath S&P 500 VIX Short Term Futures ETN: (NYSEARCA:VXX) Designed to offer exposure to the S&P 500 VIX Short Term Futures Index Total Return. The Index uses CBOE Volatility Index futures by way of a long position in the first and second month VIX Futures contracts. VXX advanced 2.1%.
ProShares Short VIX Short-Term Futures (SVXY) to track the inverse daily performance of the S&P 500 VIX Short Term Futures Index. SVXY declined 1.1%.
ProShares Ultra Short Term VIX Futures: (NYSEARCA:UVXY) UVXY is designed to deliver 2X (leveraged) returns of the day’s moves in the S&P 500 VIX Short Term Futures Index. It tacks the two front months of the futures contract. UVXY advanced 3.2%.
VelocityShares Daily 2x VIX Short Term Futures ETN (NYSEARCA:TVIX) TVIX is a leveraged VIX ETN designed to deliver 2X the returns of the daily S&P 500 Short Term Futures Index. TVIX advanced 4.7 %.
The Final Word: Volatility is showing strong signs of mean reversion as rising bond yields continue to undermine the equity markets. This trend could intensify over the next two months as traders price in another interest rate hike by the Federal Reserve.