Exchange traded funds that follow futures contracts based on the CBOE Volatility Index are trading lower with markets apparently growing more confident that the euro can survive the debt crisis.

According to a recent press release, the CBOE said that annual trading volume in 2011 surpassed twelve million contracts for the first time, with the VIX setting new trading records for annual, quarterly, monthly, weekly and single-day volumes.

However, volatility is beginning to wind down. The VIX has dropped more than 30% since mid-November, falling close to 20, report Chris Dieterich and Brendan Conway for The Wall Street Journal.

The iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) lost 35.8% over the past three months and the ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY) is down 36.1% over the last three months.

The VIX measures the implied volatility of options contracts on the S&P 500. Exchange traded products track VIX futures contracts, rather than the spot price.

Strategists believe that the VIX will continue to be pressured as investors have become accustomed to the persistent Eurozone debt problems. Ralph Edwards, director of derivatives strategy at ITG Inc, in the WSJ story notes that investors may be moving out of the markets entirely instead of riding out short-term volatility.