Trump Win affects VIX Futures: More market uncertainty?


Trump Win affects VIX Futures as index measures a 30 days volatility. It edged down 3.8 percent to 12.85. What to expect from VIX Futures ahead this week?

21 November, AtoZForex – The CBOE Volatility Index, or VIX, closed below 13 on Friday for the first time in more than a month.Yet, futures contracts on the so-called fear gauge suggest more uncertainty ahead.

Trump Win affects VIX Futures

Trump win affects VIX futures, as the index is approaching its largest in the past two years after increasing following the US Presidential elections last week, according to Pravit Chintawongvanich, the head-derivatives strategist at Macro Risk Advisors.

The VIX future that expires next month was at 14.95 Friday, while the one expiring in June was at 19.35. The sharp upward sloping nature of the futures levels over time reflects expectations that volatility will rise, despite low current levels. The VIX is a measure of latent volatility over the next month based on options prices. It typically rises when stocks fall.

Trump‘s electoral victory has left investors with questions about his policy priorities, which some say could create market bluster. For now, though, the VIX remains calm.

VIX: Technical Analysis

The Chicago board options exchange volatility index measures a 30 days implied volatility. It edged down 3.8 percent to 12.85 also, known as ”fear index” falls more than 9% for the week. The RSI is back in low 40s and the MACD has returned to the negative side. Though the large cap S&P 500 index declined 0.2% on Friday, both indicators show a bullish trend for US stock market.

Trump Win affects VIX Futures

Major VIX ETFs

The S&P 500 VIX short term futures developed to offer exposure to the S&p 500 VIX short-term futures index total return. The VIX declined 0.6% by way of a long position in the first and second month. Velocity shares daily VIX short-term futures ETN track the inverse daily performance of S&P 500 VIX short-term futures index. They have surged 0.4%.

Pro shares ultra short term VIX futures returns of the day move to S&P 500 VIX short term. UYXY also falls 0.8 %. Velocity shares daily short term VIX futures have also declined to 1.1 %.

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