Stock-rally drives VIX fear index below 20 on Wednesday.
The CBOE VIX (NYSEARCA:VXX) continued lower on Wednesday, as stock prices staged another impressive rally on the heels of U.S.-China trade negotiations.
The Chicago Board Options Exchange (CBOE) Volatility Index reached a session low of 19.48 on a scale of 1-100 where 20 represents the historic mean. It would later settle at 19.66, where it was down 4% from the previous close. That’s the lowest settlement in over a month.
In stocks, the large-cap S&P 500 Index (NYSEARCA:SPY) rose 0.4%.
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 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 advanced 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 declined 3.3%.
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 declined 4.3%.
The Final Word: Stocks are surging again, which could lead to a sustained drop in the VIX. It remains to be seen whether the rally can continue into corporate earnings season, where investors are bracing for a huge revenue miss from Apple Inc.