This Week in VIX and VXN – 10/4/2013

The S&P 500 was basically unchanged on the week, but the action during the week and concern about the equity market going forward boosted VIX and VXN.  VIX was 8% higher and the front month futures contract matched that performance.  VXN was also higher, gaining over 10%, and the front month future traded up by about 8%.  This gain in VXN occurred despite the NDX rising slightly on the week.

Two weeks ago VIX rose and the futures hardly budged.   That led to a feeling that whatever volatility move that was anticipated around a government shutdown was priced in.  Well, this week as things got uglier in Washington, DC and there was more stubbornness, the equity market reacted poorly and VIX moved up.  The continued elevation in VIX despite a net flat week for the equity market gives the appearance of continued uncertainty at least for the near term.


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Russell Rhoads, CFA

CBOE Options Institute

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and…


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