VIX ETFs Crater Despite Looming Fiscal Cliff
VIX ETFs cratered today despite looming fiscal cliff and Greek woes
VIX ETFs and the VIX Index cratered today despite the fiscal cliff being just 49 days away and Greece taking center stage once more. The VIX Index lost 10.37% to close at 16.68, while the iPath S&P 500 VIX Short Term Futures ETN (NYSEARCA:VXX) lost 6.43% and the VelocityShares Inverse VIX ETN (NYSEARCA:XIV) gained 6.32%.
The VIX and VIX ETFs cannot seem to break their sideways motion, despite enormous volatility. The VIX Index just broke through its 200 Day Moving Average again, erasing any previous gains made last week over the fiscal cliff and election fears. Despite the 10% drop, the VIX still remains above its 50 Day Moving Average, and the index appears to be “stuck” between the two averages. If Greece or the Fiscal Cliff are not enough to get the VIX higher than the ’20′ level now, then perhaps the Fiscal cliff will rock the VIX if Congress cannot come up with a solution soon. NYSEARCA:VXX is performing the same way as the index, as NYSEARCA:VXX cannot seem to break above its 50 Day Moving Average, and continues to move sideways and consolidate.
VIX ETF Update:
Volatility Index – New Methodology (VIX): Index: 16.68, -10.37% (stockcharts.com $vix)
iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX): -6.43%, This ETN is designed to track volatility in the markets as measured by the Chicago Board Options Exchange Market Volatility Index (CBOE Index), a popular measure of the implied volatility of S&P 500 index options. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets. The iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX) prices itself off of the average and implied volatility of the first two months of futures contracts of the S&P 500 Index.
VelocityShares Daily 2X VIX Short-Term ETN (NYSEARCA:TVIX): -10.20%, This ETN is designed to track 2X return on volatility in the markets as measured by the S&P 500 VIX Short-Term Futures Index. The S&P 500 VIX Short-Term Futures Index measures the volatility of the S&P 500 Index via futures contracts as traded on the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.
iPath S&P 500 VIX Mid-Term Futures ETN (NYSEARCA:VXZ): -2.20%, This ETN is designed to track volatility in the markets as measured by the CBOE Volatility Index futures contracts. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets. The iPath S&P 500 VIX Mid-Term Futures ETN (NYSEARCA:VXZ) is priced from the average volatility of the 4th through 7th month futures contracts of the S&P 500 Index as traded on the CBOE.
S&P 500 Dynamic VIX ETN (NYSEARCA:XVZ): -.62%, This ETN is designed to track volatility in the markets as measured by the S&P 500 Dynamic VIX Futures Total Return Index. The S&P 500 Dynamic VIX Futures Total Return Index seeks to combine results of volatility of the S&P 500VIX Short-Term Futures Index Excess Return and the S&P 500 VIX Mid-Term Futures Index Excess Return to create an accurate market volatility reading, as measured by the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.
Velocity Shares Daily Inverse VIX Short-Term ETN (NYSEARCA:XIV): +6.32%, This ETN is designed to inversely track the volatility in the markets as measured by the S&P 500 VIX Short-Term Futures Index. The S&P 500 VIX Short-Term Futures Index measures the volatility of the S&P 500 Index via futures contracts traded on the CBOE. The CBOE Volatility Index is also known as the “fear” index or “fear” indicator in markets.
Bottom Line: The VIX and VIX ETFs likely dropped today in a major correction move due to fear last week regarding the US elections, fiscal cliff, and Greek woes. As the Fiscal cliff continues to fester however, the VIX and VIX ETFs will likely rise once more.
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