CBOE VIX Volatility Index hovers in a narrow range on Wednesday.
The CBOE VIX (NYSEARCA:VXX) was little changed on Wednesday, as stock traders reacted to a disappointing inflation report that may have strengthened the Federal Reserve’s hand in lowering interest rates.
The Chicago Board Options Exchange (CBOE) Volatility Index, commonly known as the VIX, traded within a one point range in the middle of the week. It would eventually settle down 0.6% at 15.89 on a scale of 1-100 where 20-25 represents the historic average. The so-called “fear index” continues to imply a general sense of complacency in the stock market.
On the topic of equities, the large-cap S&P 500 Index (NYSEARCA:SPY) declined 0.2% on Wednesday.
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 0.3%.
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 declined 0.5%.
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 0.9%.
The Final Word: Weak inflation is ultimately a good sign for risk-on traders who have grown reliant on central bank liquidity. The low inflation trend could ultimately compel the Fed to lower interest rates once again, a move that could kick off the next bull run.