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
- US Slams Turkish Bombing Of American Coalition Partners As "Unacceptable And A Source Of Deep Concern" | ZeroHedge
- Why Russia Won't Collapse | ZeroHedge
- Japanese Government Now The Largest Shareholder Of 474 Big Companies | ZeroHedge
- $oRo$ (Part III) | ZeroHedge
- Kurt Kallaus: Slow Growth Persists but US Recession Likely Still Years Away | Financial Sense
- Dutch Central Bank Refuses To Publish Gold Bar List For Dubious Reasons | ZeroHedge
- Ron Paul: The Right Lessons From Obamacare's Meltdown | ZeroHedge
The most relevant financial news and articles from the Internets
- Donald Trump goes on extended early-morning Twitter tirade | Business Insider
- We asked and you answered — here are 9 horrifying stories about terrible... | Business Insider
- The 5 things you need if you want funding from one of Silicon... | Business Insider
- How Britney Spears makes and spends her millions | Business Insider
- There's an obvious gap in the sandwich market — and this Whole... | Business Insider
- This chart shows how quickly Netflix is widening its lead (NFLX) | Business Insider
- THE CONNECTED CAR REPORT: Forecasts, competing technologies... | Business Insider