CBOE VIX Volatility Index bounces back following sharp decline.
The CBOE VIX (NYSEARCA:VXX) rose on Wednesday, as political volatility drove the major stock indexes lower.
The Chicago Board Options Exchange (CBOE) Volatility Index climbed 7.9% to 12.25, where it settled woff session highs. The volatility gauge reached a high of 12.59 before paring gains in afternoon trade. The VIX plunged on Tuesday as equities rallied.
The large-cap S&P 500 Index (NYSEARCA:SPY) pared losses to finish down 0.4% 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 0.8%.
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 declined 0.8%.
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 1.5%.
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 advanced 1.2%.
The Final Word: Volatility remains low by historic standards, but is making a gradual recovery. Political risks loom large for equities as the Trump administration struggling to follow through on its mandate.