CBOE VIX Volatility Index declines slightly as equities stem decline.
The CBOE VIX (NYSEARCA:VXX) declined on Friday, but finished firmly higher for the week as North Korea tensions triggered heavy selling pressure in the market.
The Chicago Board Options Exchange (CBOE) Volatility Index fell 0.53 points, or 3.3% to 15.51 on Friday. The index reached a daily high of 17.28, which would have been the highest close since the election.
Volatility is gaining traction, with the short-term oscillators showing stronger momentum.
The large-cap S&P 500 Index (NYSEARCA:SPY) edged up 0.1% on Friday, but closed down more than 1% for the week.
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 2.9%.
VelocityShares Daily Inverse VIX Short Term Futures ETN: (NYSEARCA:XIV) Designed to track the inverse daily performance of the S&P 500 VIX Short Term Futures Index. XIV declined 4.6%.
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 5.3%.
VelocityShares Daily Short Term VIX 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 5.3%.
The Final Word: Geopolitical tensions have brought volatility back in play at a historically challenging time of the year for stocks. This trend could intensify next week as North Korea-US tensions escalate.