Rebounding oil prices lifted energy stocks on Thursday; volatility declined as a result.
The CBOE VIX (VXX) retreated on Thursday, as stocks mounted a modest relief rally on the back of rebounding oil prices.
The Chicago Board Options Exchange (CBOE) Volatility Index, commonly known as the VIX, reached an intraday low of 68.57 on a scale of 1-100 where 20 represents the historic average. VIX would eventually settle down 5.8% at 72.00.
In stocks, the large-cap S&P 500 Index (SPY) rose 0.5% on Thursday.
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 10.1%.
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 5.4%.
ProShares Ultra Short Term VIX Futures: (UVXY) UVXY is designed to deliver 1.5X (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 15%.
VelocityShares Daily 2x VIX Short Term Futures ETN (TVIX) TVIX is a leveraged VIX ETN that tracks an index of futures contracts on the VIX Short-Term Futures Index. It provides 200% leverage on the volatility moves. TVIX declined 19.9%.
The Final Word: Despite the modest pullback, VIX remains well above the historic average. At current levels, the fear index implies markets are in crisis mode as investors grapple with the effects of coronavirus.