Vix: the business angle

The VIX spot price fell 3.69% to 18.02 on Monday as the S&P 500 and Nasdaq closed at record highs, but VIX futures for May and June stayed above 20. Vix has emerged this Friday as one of the stories drawing attention in South Korea.

Key facts

• The VIX spot price fell 3.69% to 18.02 on Monday as the S&P 500 and Nasdaq closed at record highs, but VIX futures for May and June stayed above 20.
• The Cboe had the VIX spot at 18.02 as of Monday, down 3.69%.
• May VIX futures traded at 20.05 on Cboe, with June even higher at 21.10—both sitting above the spot VIX.
• The S&P 500 hit fresh record highs on Thursday, yet the VIX hovered around 20—actually up from five days prior, even though the S&P was trading about 100 points below its current level back then.
• According to a 24/7 Wall St. piece out Friday, the VIX dropped under 19 to roughly 18.82, shedding 2% for the session and marking a 28% slide for the past month as both the S&P 500 and SPY reached fresh all-time highs.

What we know

Going deeper, the Cboe had the VIX spot at 18.02 as of Monday, down 3.69%.

On the substance, May VIX futures traded at 20.05 on Cboe, with June even higher at 21.10—both sitting above the spot VIX.

Beyond the headlines, the S&P 500 hit fresh record highs on Thursday, yet the VIX hovered around 20—actually up from five days prior, even though the S&P was trading about 100 points below its current level back then.

More precisely, According to a 24/7 Wall St. piece out Friday, the VIX dropped under 19 to roughly 18.82, shedding 2% for the session and marking a 28% slide for the past month as both the S&P 500 and SPY reached fresh all-time highs.

It is worth noting that the article also pointed out that the VIX and S&P 500 have actually been moving up in tandem—a setup that shows up only about 20% of the time, by their count.

By the numbers

At this stage, VIX wrapped up Friday at 18.71, according to Saxo options strategist Koen Hoorelbeke.

On a related note, Wall Street’s so-called fear gauge just slipped under 20 again, yet traders aren’t seeing the classic green light that usually comes when equities notch fresh highs.

Going deeper, the index, according to Cboe, tracks anticipated short-term swings based on S&P 500 options.

On the substance, S&P 500 and Nasdaq notched new record closes Monday, undeterred by looming megacap earnings, a slate of U.S. growth and inflation numbers, the Federal Reserve’s rate call, and new developments out of the Middle East.

The wider context

On a related note, Futures were mixed as investors weighed capex-heavy earnings from Meta and Microsoft, upbeat results from Alphabet and Amazon, and incoming PCE and GDP data.

Going deeper, it finished the week up 1.25 points at 18.7—even as the S&P 500 pushed to fresh record highs and notched a 4.7% gain for the year.

On the substance, Saxo pointed out near-the-money S&P 500 puts were priced with implied volatility around 24% to 25%, compared to about 21% for similar calls.

Beyond the headlines, But the S&P 500 edged up 0.12% to 7,173.93, while the Nasdaq added 0.20%, closing at 24,887.10. “The market is just trying to deal with the rally that’s been going on and digest the latest all-time highs that we’ve made on the indices,” said Robert Pavlik, senior portfolio manager at Dakota Wealth, speaking to Reuters.

More precisely, Together, those names make up about 44% of the S&P 500’s total market capitalization, Reuters noted.

The bottom line

• The Cboe had the VIX spot at 18.02 as of Monday, down 3.69%.
• The S&P 500 hit fresh record highs on Thursday, yet the VIX hovered around 20—actually up from five days prior, even though the S&P was trading about 100 points below its current level back then.
• The article also pointed out that the VIX and S&P 500 have actually been moving up in tandem—a setup that shows up only about 20% of the time, by their count.
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