VXX Stock Recent News

Wall Street delivered a muted performance last week due to a host of global tensions.

We have highlighted three ETFs each from the best and worst-performing zones of last week.

Volatility ETFs stood out over the last week amid the big market sell-off. Volatility spiked considerably as a wave of selling spread from Japan.

VXX and UVXY are long volatility ETPs using VIX futures for convex payoff in the event of a market crash. VIX is at 24 following a dramatic spike to 60. Both ETPs have had huge rallies, but the rally is expected to be short-lived. Long volatility funds like UVXY and VXX tend to bleed capital due to negative roll yield, making them terrible for long-term holding.

Volatility roared back amid market rotation and growing anxiety about a slowing U.S. economy. Investors could benefit from the rising market volatility with ETF/ETN options available in the market.

For investors seeking momentum, iPath Series B S&P 500 VIX Short-Term Futures ETN VXX is probably on the radar. The fund just hit a 52-week high and is up 173.7% from its 52-week low price of $39.98/share.

The S&P 500 is moderately overvalued with a P/E ratio above its historic mean, but it reached a new all-time high. The CBOE Volatility Index (VIX) is below 13, indicating low volatility in the market. Days with both an all-time high for the S&P 500 and a VIX below 13 were historically followed by a lower than average three-month performance.

Over the last month, the top ten most shorted ETFs have attracted Inflows of $5.6B. As equity markets in the US continue to set record highs, investors appear to expect the bull market to continue. ETF flow data and securities finance short interest data remain key to understanding investor behavior.

Geopolitical tensions in the Middle East have escalated, with Iran launching an attack on Israel in response to an attack on its embassy in Syria. Investors seeking ways to hedge their portfolios may consider the VXX ETN, as it holds long positions in near-month VIX futures. I advise reducing portfolio exposures or allocating a small percentage to hedges like the VXX in light of the heightened geopolitical risks.

The sudden rise of chaos in the market due to geopolitical risks brightened the appeal for safe haven assets.