CBOE VIX Volatility Index pulls back sharply as stocks return to strength.
The CBOE VIX (NYSEARCA;VXX) was back on the defensive Wednesday, briefly falling below 13.00 after central-bank testimony drove stocks toward new highs.
The Chicago Board Options Exchange (CBOE) Volatility Index, also known as the VIX, reached a session low of 12.98 on a scale of 1-100 where 20-25 represents the historic average. The so-called “fear index” eventually settled down 6.7% at 13.14, snapping a three-day rally.
In stocks, the large-cap S&P 500 Index (NYSEARCA:SPY) advanced 0.5%.
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 1.6%.
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 declined 4.6%.
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 5.6%.
The Final Word: With a July rate cut baked into the market, stocks are likely heading higher in the short term. This means a deeper selloff for the VIX, which continues to trade well below the historic average.