CBOE VIX Volatility Index trades above the long-term average.
The CBOE VIX (NYSEARCA:VXX) rose on Thursday, as risk-off sentiment drove investors away from stocks and into the relative calm of safe havens.
The Chicago Board Options Exchange (CBOE) Volatility Index touched a daily high of 28.84 before paring gains later in the session. The so-called “fear index” settled at 26.32, where it was up 14.5% from the previous close. Vol spiked more than 40% on Wednesday as equity markets experienced their worst single-day drop in six months.
In stocks, the large-cap S&P 500 Index (NYSEARCA:SPY) closed down 2.1% on Thursday.
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 8.4%.
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 4.2%.
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 12.9%.
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 17%.
The Final Word: Volatility is back with a vengeance and looks poised to stick around for a while longer. Investors should keep close tabs on bond yields to gauge the future direction of stock prices.