The iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX), which tracks futures contracts on Wall Street’s “fear gauge,” rallied nearly 5% Monday morning as the exchange traded note saw heavy volume of more than 5 million shares in the first half-hour of trading.
The VIX-futures ETN jumped as stocks fell with concerns over Europe’s sovereign-debt woes triggering the global sell-off.
SPDR S&P 500 ETF (NYSEArca: SPY) was down more than 1% while the Dow slipped about 150 points.
ETFs that follow CBOE Volatility Index futures continued to decline last week. For example, iPath S&P 500 VIX Short-Term Futures came into Monday’s session with a 40% year-to-date loss. This suggests investors are complacent and confidence hasn’t been threatened by recent consolidation in stocks.
Still, a 10% rise in the VIX on Monday suggests Europe’s debt crisis is back in the spotlight as a key market worry.
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