VIX-Tracking ETFs Are Finally Bouncing Amid Trump Travel Ban Turmoil
We have not seen the VIX move like this since Trump’s election last November, as it is up over 17% in early trading, and has met some overhead resistance at its 50 day MA.
Nonetheless, just last week we commented on a $10 handle VIX that is suddenly north of $12 seemingly after weekend tensions relating to Trump’s executive orders, a terror attack in Quebec, etc.
In spite of poor performance, Long Volatility VXX (iPath S&P 500 VIX Short-Term Futures ETN) has raised over $280 million year-to-date, while UVXY (ProShares Ultra VIX Short-Term Futures ETF) has pulled in more than $160 million respectively during the same time frame.
February 20 calls in VXX traded in decent size last week in a well-timed move ahead of the large move higher today with the VXX in the $18-$19 range and these options are basically at-the-money now. Illustrating the disconnect between the VIX index itself and VIX futures-based Long Volatility ETPs such as VXX is the move today for instance, where we see VIX up more than 17% this morning while VXX is up only 5%. We remind readers that VXX actually traded at yet another new all-time low just last Friday before today’s move higher.
The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) was trading at $20.09 per share on Monday morning, up $1.12 (+5.90%). Year-to-date, VXX has declined -21.25%, versus a 1.46% rise in the benchmark S&P 500 index during the same period.
VXX currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #5 of 10 ETFs in the Volatility ETFs category.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.
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