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VIX ETFs Surge as S&P 500 Extends Losing Streak


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 (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 (VIXY) : up 2.6% over the past week
  • iPath S&P 500 Dynamic VIX ETN (XVZ) : down 1.3% over the past week
  • VelocityShares Daily Long VIX Short-Term ETN (VIIX) : up 1.8% over the past week

Leveraged VIX ETFs include:

  • ProShares Ultra VIX Short-Term Futures (UVXY) : up 5.3% over the past week
  • VelocityShares Daily 2x VIX Short Term ETN (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.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.