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
- European Bloodbath: Freefalling EUR Plummets On Broad Liquidation Puke | ZeroHedge
- FiGHT CLuB 1776... | ZeroHedge
- Robin Griffiths Sees Topping Process in Stocks, Expects Bear Market This Year | Financial Sense
- "Cheerful" Dutch Financier Becomes 4th ABN Amro Banker Suicide | ZeroHedge
- ECB Preview: FAQ | Financial Sense
- Yen Strength Weighs on Stocks While Lifting Gold Higher | Financial Sense
- Remembering The Currency Wars Of The 1920s & 1930s (And Central Banks' "Overused Bag Of Tricks") | ZeroHedge
The most relevant financial news and articles from the Internets
- ECB Board Member Explains Why Europe Embarked On Its Massive... | Business Insider
- A Crucial Fact About The Economics Of The Drug Trade | Business Insider
- ... | StreetInsider.com
- King Abdullah's Successful Reign... | Business Insider
- Hedge Fund Billionaire Louis Bacon Files $50 Million Defamation Lawsuit Against His... | Business Insider
- Notable... | StreetInsider.com
- iPhone Strength Boosts Skyworks Results: What Wall Street's Saying | TheStreet.com