Fed Optimism Spurs Record Bets Against Stock Volatility
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A soft touch on monetary policy will continue to suppress stock volatility, or so suggests the record stretch of cash going into an exchange-traded note that rallies as calm returns to equities.
The Chicago Board Options Exchange Volatility Index, known as the VIX, has decreased 31 percent this month and investors are wagering on further declines. In the five weeks through Aug. 15, they put almost $320 million into the VelocityShares Daily Inverse VIX Short Term ETN -- the longest stretch of weekly investments since the note began trading in 2010.