Volatility is the Stock Pick (VXX)
The trade this week was not Apple Inc (NASDAQ:AAPL) hitting $500. It's been the iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) and yesterday the fund finished up 5.6%.
(WallStNation.com) Since Wednesday of last week (Feb 6th) the VXX has jumped 16%. Last summer we witnessed the VXX increase 109% in 30 days while the Dow Jones has plunged 13.6%. The Volatility Index (VIX), also known as the "Fear Index" has increased 11% in the past 4 trading sessions and hit 21.70 today. In 2012 the VIX has spiked 10% in four trading sessions only twice.
The "VIX" or Volatility Index is based on data collected by the Chicago Board Options Exchange. Each day, the CBOE calculates a number based on prices paid for puts and calls for the S&P 500. This number gives traders an idea of the implied volatility in the market for 30 days.
A direct investment in VIX (commonly referred to as spot VIX) is not possible. The S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) holds VIX futures contracts, which could involve roll costs and exhibit different risk and return characteristics.
Bottom line: Traders are looking to the VXX thanks to the uncertainty with Greece 's debt and everything else under the sun. This 17% jump since last week could be a new trend if the headlines do not improve.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- 8th Year Presidential Cycle Predicts Trouble for the Rest of 2016 | Financial Sense
- Gold “Chart of The Decade” – Maths Suggest $10,000 Per Ounce Says Rickards | ZeroHedge
- It's The Debt Stupid: Scotiabank Warns "At Some Point 'The Future' Becomes 'Today'" | ZeroHedge
- Warning: Hawkishness Ahead | Financial Sense
- Lithium War Heats Up After Epic Launch of Tesla Model 3 | Financial Sense
- Trending On Twitter | ZeroHedge
- Q1 GDP Advance Estimate at 0.5%, Worse Than Mainstream Forecasts | Financial Sense
The most relevant financial news and articles from the Internets
- 5 avoidable mistakes that can cost you the job | Business Insider
- Here's how we ranked the best restaurants in America | Business Insider
- We went inside a legal marijuana dispensary — it was... | Business Insider
- Facebook has found a best friend in Microsoft (MSFT, FB) | Business Insider
- Baby Boomers are facing a whole new retirement 'crisis' | Business Insider
- A college admitted that spending $17,500 on a table may... | Business Insider
- This is how Taco Bell, Starbucks, and other fast-food chains are... | Business Insider