CBOE VIX Volatility Index swings lower Wednesday as stocks recover.
A recovering stock market sent the CBOE VIX (NYSEARCA:VXX) crashing back down Wednesday, as traders placed bigger bets that the Federal Reserve will slash interest rates again this month.
The Chicago Board Options Exchange (CBOE) Volatility Index fell 9% to 18.46 on a scale of 1-100 where 20 represents the historic average. VIX spiked double-digits on Tuesday, as stocks experienced one of their worst slides of the year.
On Wednesday, stock prices recovered, with the S&P 500 Index (NYSEARCA:SPY) advancing 0.9%.
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 1.7%.
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 5.5%.
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 6.5%.
The Final Word: Volatility is edging closer to its historic mean, a troubling sign for the bull market. The U.S.-China trade war is expected to drag until the 2020 election, providing equity investors with another strong headwind.