VIX Spikes As Political Dance Turns Ugly (VXX)
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Volatility on the S&P 500 spiked on Wednesday as fiscal cliff drama reached a fever pitch, with open squabbling on Capitol Hill. Over the last few days, republicans have been pressing the White House to accept its so-called "Plan B", which keeps income tax rates from rising on Americans earning less than $1 million and maintained the current rate on estate taxes.
The plan is being dismissed by President Obama, who says the bill has no chance of passing though the Senate . . . and so investor wait, doing their best to avoid head fakes as politicians dance.
Heading into the close, the VIX was higher by 10 percent. As is typical, the related ETF, iPath S&P 500 VIX ST Futures ETN (NYSE: VXX), gained about half that much, trading higher by 4.4 percent to 29.4.
The plan is being dismissed by President Obama, who says the bill has no chance of passing though the Senate . . . and so investor wait, doing their best to avoid head fakes as politicians dance.
Heading into the close, the VIX was higher by 10 percent. As is typical, the related ETF, iPath S&P 500 VIX ST Futures ETN (NYSE: VXX), gained about half that much, trading higher by 4.4 percent to 29.4.
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