VIX returns with a vengeance as stocks plunge.
The CBOE VIX (NYSEARCA:VXX) surged on Thursday, reaching the highest level in three months as equity prices collapsed.
The Chicago Board Options Exchange (CBOE) Volatility Index spiked 32% to 15.33, levels not seen since early July. It would later settle at 14.52, up more than 25%. Volatility broke out as stock prices fell after the open, sending the Relative Strength Index into the mid 60s.
In stocks, the large-cap S&P 500 Index (NYSEARCA:SPY) declined 8% 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 6.1%.
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 3%.
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 9.3%.
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 advanced 11.1%.
The Final Word: Volatility returned in a big way on Thursday. Investors should keep close tabs on bond yields as they could determine the market’s fate in the short run.