VIX Daily Update: Volatility Falls on Trade Optimism
CBOE VIX Volatility Index continues lower as stocks extend recovery.
The CBOE VIX (NYSEARCA:VXX) continued lower on Thursday after reports indicated that the Trump administration was considering easing tariffs on China to hasten a new trade agreement with Beijing.
The Chicago Board Options Exchange (CBOE) Volatility Index declined 5.9% to 17.91, its lowest since early December. The so-called “fear index” is trading at roughly half of its December peak, when it rocketed north of 36.00.
In stocks, the large-cap S&P 500 Index (NYSEARCA:SPY) rose 0.8% on Thursday.
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 0.7%.
ProShares Short VIX Short-Term Futures (SVXY) to track the inverse daily performance of the S&P 500 VIX Short Term Futures Index. SVXY advanced 0.4%.
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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 1.4%.
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 2.3%.
The Final Word: Positive developments on trade and strong corporate earnings could drive volatility lower in the coming weeks. It remains to be seen whether the U.S. and China can come to terms before the Mar. 1 deadline.