Strong gains on Wall Street drive CBOE VIX Volatility Index sharply lower.
The CBOE VIX (NYSEARCA;VXX) headed for losses Thursday, as stocks held on to firm gains following the minutes of the Federal Reserve’s June policy meeting.
The Chicago Board Options Exchange (CBOE) Volatility Index declined 7.3% to close at 14.97, on a scale of 1-100 where 20 represents the historic average. The so-called “fear index” touched a session low of 14.47.
In equities, the large-cap S&P 500 Index (NYSEARCA:SPY) gained 0.9% 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 declined 3.3%.
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 1.4%.
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 5.4%.
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 6.8%.
The Final Word: The Fed acknowledged last month that trade risks pose a real threat to the U.S. economy. Its only a matter of time before those risks return to Wall Street, which could make volatility a mainstay for the foreseeable future.