Sat, Mar 28, 2015
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

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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. Other Voices: The role of diversification in CTA portfolios[more]

    2014 brought a resurgence of managed futures strategies, or CTAs, which performed very well as a whole, outperforming all other hedge fund strategies. However, a closer look reveals that there was a wide range of performance, or return dispersion, across managers. The bottom line? Not all CTAs

  4. Neuberger Berman unit buys 20% stake in activist hedge fund Jana Partners for $2bn[more]

    Komfie Manalo, Opalesque Asia: Neuberger Berman’s unit Dyal Capital Partners bought a 20% stake in activist hedge fund firm Jana Partners worth $2bn, WSJ.com reports. The deal comes as activi

  5. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

 

banner