CBOE VIX Volatility Index hits close to 20 as stocks sell off.
The CBOE VIX (NYSEARCA:VXX) rose sharply on Tuesday, as investors cut ties to riskier assets ahead of U.S.-China trade talks.
The Chicago Board Options Exchange (CBOE) Volatility Index, commonly known as the VIX, peaked at 20.19 on a scale of 1-100 where 20 represents the historic average. VIX would later consolidate at 20.14, having gained 12.8%.
In stocks, the large-cap S&P 500 Index (NYSEARCA:SPY) declined 1.6% on Tuesday.
ProShares Short VIX Short-Term Futures (SVXY) to track the inverse daily performance of the S&P 500 VIX Short Term Futures Index. SVXY declined 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 advanced 11.9%.
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 advanced 14.2%.
The Final Word: Stock markets could get extremely volatile this week on any sign that U.S.-China trade talks are stalling. A deal this week is considered highly unlikely after China said industrial policy and government subsidies are off the table.