Volatility is the Stock Pick (VXX)

Volatility (NYSE: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 today the fund finished up 5.6%.

Since Wednesday of last week (Feb 6th) the VXX has jumped 17%.  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.

 

WallStNation.comThanks for visiting WallStNation.com, to assist your investing research try using our Search (click to access) or review the list of Tickers (click to access) that link directly to articles related to the given stock/security.

To Browse our Most Recent Stories (click here)


Share WallStNation.com Content

Share this article with others, WallStNation.com is the Independent Wall Street Newspaper. Thanks for Reading!

Daily Market Summary




Please Review the WallStNation.com Disclaimer and remember that information provided by our site is at the investor's sole financial risk. Please Review for more Details