CBOE VIX Volatility Index heads lower after gaining nearly 30% at the beginning of week.
The CBOE VIX (NYSEARCA:VXX) headed lower on Tuesday, as equity markets regained their composure following an early-week selloff that was triggered by escalating trade tensions between the U.S. and China.
The Chicago Board Options Exchange (CBOE) Volatility Index declined more than 7% to settle at 15.99. On Monday, the so-called “fear index” closed at its highest level in over three months. The Monday spike sent the VIX’s RSI above 60, which is a bullish sign from the perspective of momentum.
In equities, the S&P 500 Index (NYSEARCA:SPY) gained 0.2% on Tuesday.
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 4.3%.
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 2%.
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 5.8%.
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 8%.
The Final Word: Volatility is making its presence felt as global superpowers tussle for trade dominance. This paradigm could dictate the market for the remainder of the summer.