Volatility ETNs Finally Bounce Off All-Time Lows Amid Rising VIX
Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out a sudden jump in volatility, along with continued investor interest in gold and China-focused funds.
Don’t look now, but the VIX has been flying higher the past two sessions, presently trading in the high $12’s after registering a $10 handle in four of the past six trading sessions.
While “Long Volatility” ETPs VXX and UVXY are well off of their recent all-time lows on this move, the negative effect of contango in the VIX futures market are painfully evident here in terms of off the mark returns in both products.
Elsewhere, we have mentioned the recent appetite via inflows in GLD (SPDR Gold) as well as GDXJ (VanEck Vectors Junior Gold Miners), and Gold prices are up once again this morning with GLD trading at its highest level since last November pre-election. Precious metals continue to be a popular safehaven asset amid a whole lot of political uncertainty, despite equities hitting all-time highs day after day.
Finally, we need to reiterate the continued interest we have seen this week in FXI (China) via upside “spring” calls, involving both April and May options on the surge in that market lately.
The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) was trading at $17.96 per share on Thursday afternoon, up $0.55 (+3.16%). Year-to-date, VXX has declined -29.60%, versus a 4.88% 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 #3 of 11 ETFs in the Volatility ETFs category.
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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