iPath S&P 500 VIX ETN (VXX) Plunges Back To New All-Time Lows

Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out a drop in volatility that happened almost as quickly as last week’s spike, and subsequent flight away from low-volatility products.

And just like that, Long Volatility ETPs are trading at new all-time lows once again today, a the VIX itself is below $10 in early trading.

As we have repeated here consistently lately, “Vol of Vol” remains high in the marketplace, and trading volumes in the prominent Long and Short Volatility ETPs such as VXX, TVIX, UVXY, SVXY, XIV, and so forth remains high.

Interestingly, more than $350 million has flown into SVXY lately (ProShares Short VIX Short-Term Futures ETF), perhaps to the point that we make above, as investors in this case seem to think that playing the short side of “Volatility” ETPs is the play heading into the end of May trading.

Elsewhere, we have seen some position trimming in a leading “Low Volatility Equity” ETF that we have mentioned here on several occasions, SPLV (PowerShares S&P 500 Low Volatility). About $660 million has left the fund via redemptions lately, despite the fund trading at new 52-week highs day after day lately.

The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) was trading at $13.67 per share on Thursday morning, up $0.09 (+0.66%). Year-to-date, VXX has declined -46.41%, versus a 8.18% rise in the benchmark S&P 500 index during the same period.

VXX currently has an ETF Daily News SMART Grade of F (Strong Sell), and is ranked #4 of 12 ETFs in the Volatility ETFs category.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.