CBOE VIX Fear Index declines sharply as stocks snap back to health.
The CBOE VIX (NYSEARCA:VXX) declined sharply on Monday, as Wall Street shrugged off Hurricane Irma en route to new record highs.
The Chicago Board Options Exchange (CBOE) Volatility Index fell 11.5% to close at 10.73, the lowest since September 1. The volatility gauge traded between 10.51 and 11.39, and continues to show underlying complacency in the market.
Stocks rose briskly on Monday, with the large-cap S&P 500 Index (NYSEARCA:SPY) gaining 1.1% to reach a new record high of 2,488.11.
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 declined 5.6%.
VelocityShares Daily Inverse VIX Short Term Futures ETN: (NYSEARCA:XIV) Designed to track the inverse daily performance of the S&P 500 VIX Short Term Futures Index. XIV advanced 5.8%.
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 declined 11.3%.
VelocityShares Daily Short Term VIX 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 declined 9.8%.
The Final Word: Volatility could drift lower in the near term as equities test new highs. The fear index has shown signs of mean reversion in recent months, but remains firmly capped below historic levels.