CBOE VIX Volatility Index sees sharp rise as stocks reverse course.
The CBOE VIX (NYSEARCA:VXX) traded higher on Wednesday, as stocks came under selling pressure in the latter half of the day.
The Chicago Board Options Exchange (CBOE) Volatility Index gained 12.1% to close at 17.85, on a scale of 1-100 where 20 represents the historic average. Vol traded between 14.76 and 18.19. on Wednesday.
In equities, the large-cap S&P 500 Index (NYSEARCA:SPY) declined 0.8% 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 advanced 5.7%.
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 2.6%.
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 8.8%.
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 advanced 10.5%.
The Final Word: Volatility is once again approaching three-and-a-half month highs, as trade and political risks continue to impact investors’ psyche. This suggests that volatility could become a mainstay as we head into the summer lull period.