On hopes a coronavirus rescue bill is close, markets are exploding higher.
At the moment, Dow futures are up 930 points. S&P 500 futures are up 110, with NASDAQ futures showing a gain of 350 points. There’s hope this can hold after days of madness.
Senator Chuck Schumer and Treasury Secretary Steven Mnuchin said they hope to have a deal by this morning. “There are still a few little differences. Neither of us think they are in any way going to get in the way of a final agreement,” Schumer said, as quoted by CNBC.
House Speaker Nancy Pelosi added, “I think there is real optimism that we could get something done in the next few hours.” The bill is “getting to a good place… if they stay there.”
If we get a deal in place, market volatility could substantially decrease as well.
That’s great news for the volatility trades we spoke of just yesterday, including:
ProShares Short VIX Short-Term Futures ETF (SVXY)
ProShares Short VIX Short-Term Futures ETF provides short exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration, according to Pro Shares.
Since Monday, the SVXY has run from $29 to $33.
VelocityShares Daily Inverse VIX Medium-Term (ZIV)
The ETN seeks returns that are -1x the returns of the S&P 500 VIX Mid-Term Futures Index ER for a single day, says VelocityShares. Since Monday, ZIV has run from $32.05 to $38.70.
iPath Barclays Inverse S&P 500 VIX Short-Term Futures ETN (XXV)
The Index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects market participants’ views of the future direction of the VIX index at the time of expiration of the VIX futures contracts comprising the Index.
Since Monday, XXV has run to $37.