CBOE Volatility Index related exchange traded funds spiked Tuesday, with the VIX hovering around a six week high, as the S&P 500 moves toward its longest losing streak in six weeks.
The iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX), an exchange traded note, rose 4.7% Tuesday. VXX is up 2.7% over the past week, but the note is still down 64% year-to-date.
The CBOE Volatility Index surged 5.1% Tuesday and traded around 15, shifting back above its 50-day and 200-day moving averages.
Broad U.S. stocks extended losses into a third session Tuesday as investors contemplated the Fed’s next move, reports Kate Gibson for CNBC.
The S&P 500 declined 0.7% and is trading around 1,788.
“The thought that has emerged since last week is perhaps the numbers are so good the Fed will taper a little sooner,” JJ Kinahan, chief strategist at TD Ameritrade, said in the article. “Plus, we’ve been at all-time highs and people want to protect themselves as we head into year-end.”
The VIX reflects the market’s expectation of 30-day volatility through S&P 500 index options. Essentially, the index is used as an “investor fear gauge” and measures the implied volatility in the S&P 500. Typically, a VIX reading below 20 reflects a more complacent market.
Other VIX-related ETFs include:
- ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY): up 2.6% over the past week
- iPath S&P 500 Dynamic VIX ETN (NYSEArca: XVZ): down 1.3% over the past week
- VelocityShares Daily Long VIX Short-Term ETN (NYSEArca: VIIX): up 1.8% over the past week
Leveraged VIX ETFs include:
- ProShares Ultra VIX Short-Term Futures (NYSEArca: UVXY): up 5.3% over the past week
- VelocityShares Daily 2x VIX Short Term ETN (NYSEArca: TVIX): up 3.6% over the past week
iPath S&P 500 VIX Short Term Futures ETN
For more information on the CBOE Volatility Index, visit our VIX category.
Max Chen contributed to this article.