CBOE VIX Volatility Index moves lower after Fed decision to raise interest rates.
The CBOE VIX (NYSEARCA:VXX) declined on Wednesday, as equities rebounded following the Fed’s decision to raise interest rates.
The Chicago Board Options Exchange (CBOE) Volatility Index fell 5.5% to close at 11.63, partially offsetting the previous day’s decline. The fear index has held firmly lower for much of the he last eight months, reflecting broad gains on Wall Street.
The large-cap S&P 500 Index (NYSEARCA:SPY) advanced 0.7% on Wednesday.
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 3.7%.
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 advanced 3.9%.
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 7.4%.
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 declined 7.6%.
The Final Word: Historically low volatility could propel equities to new highs as investors look forward to a potentially brighter economic outlook under President Donald Trump.