VIX ETFs Surge As S&P 500 Extends Losing Streak

|
 |  Includes: ACWV, CVOL, IVOP, PHDG, SVXY, TVIX, TVIZ, UVXY, VIIX, VIIZ, VIXH, VIXM, VIXY, VQT, VXX, VXZ, XIV, XVIX, XVZ, XXV, ZIV
by: Tom Lydon

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, 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 (NASDAQ: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 (NASDAQ:TVIX): up 3.6% over the past week

iPath S&P 500 VIX Short-Term Futures ETN

Click to enlarge

Max Chen contributed to this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.