The S&P 500 Short-term VIX Futures index shot up by almost 60% in the week to 8 August, triggering a surge in activity in exchange-traded notes (ETNs) on the index.
The volatility index saw huge a increase as the S&P 500 fell by almost 13% following uncertainty over the European debt crisis, a near debt default in the US and the subsequent downgrade of its credit rating. The volatility was repeated throughout developed market equity indexes. Trading in volatility products leapt up. Barclays' iPath S&P 500 VIX Short-Term Futures ETN (which trades on the New York Stock Exchange) had $4.8 billion of trades on 8 August, compared to $553 million on 8 July. Assets under management (AUM) also spiked on the 8 August at $1.6 billion, before falling to $73...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
