Fri, Apr 18, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Weak US economic data could cause more VIX spikes

Wednesday, February 05, 2014

Bailey McCann, Opalesque New York:

Volatility could be returning to the market following a low volatility 2013. The Chicago Board Options Exchange (CBOE) Volatility Index jumped 34% last month for the biggest January on record. The VIX climbed 16% on Monday to 21.44, a one-year high after economic data showed weakened US manufacturing numbers. The market reaction was notable as there were periods of slightly weaker manufacturing and other economic indicators in 2013 that failed to spark similar activity. With retail sales and non farm payroll numbers still on the horizon, this week could be very active on the VIX.

"I think you're starting to see that the market thinks there has been too much news falling below expectations - China, manufacturing, emerging markets, earnings. This could be a wake up call for what we're in for in 2014," says Will Lloyd, Managing Director, VelocityShares in an interview with Opalesque.

Last week was the single largest week in history for volumes (in terms of number of contracts traded) on the front-month VIX futures, capping off the largest volume month in history. As volatility spikes, so too are there large increases in short volatility bets. During Monday's spike, XIV traded nearly $1bn - almost triple its usual volume. XIVSO also saw a 58.5% increase in January.

Economists expect non farm payrolls to be generally positive for January, the survey week happened before the polar vortex weather system slowed everyth......................

To view our full article Click here

Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  2. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  3. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  4. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo

  5. Opalesque Exclusive: Pensions, endowments, family offices reconsider life settlement investments[more]

    Bailey McCann, Opalesque New York: Hedge funds were once the largest investors in the life settlement industry, now the industry is seeing more interest from pensions, endowments and family offices directly. Life settlements have always been considered a niche part of the investing landscape, an