Cboe Global Markets has introduced a one-day edition of the popular Wall Street fear gauge, VIX1D, offering a snapshot of volatility expectations for the S&P 500 over the next trading day. This comes as a response to the regular VIX, which provides a 30-day view on expected stock-market volatility, not reacting as much as anticipated during the collapse of Silicon Valley Bank and Signature Bank. The VIX1D is expected to behave more volatile than indices measuring longer time horizons.
The introduction of the VIX1D comes after recent market events, where the VIX rose 38.8%, while the backtested VIX1D Index jumped 162.7%. Analysts believe the shorter-term version may be more appealing to traders, as longer-term volatility has decreased in recent weeks, according to Michael Hewson, chief market analyst at CMC Markets.
As stocks have traded within a range between March lows and highs earlier this month, Hewson suggests people will be more inclined to trade the VIX1D. The Cboe also offers nine-day, three-month, six-month, and one-year versions of the volatility index for varying time horizons.
