How'd Your Week Go? Low-Vol Blowup, Stocks Jitters, in 5 Charts

• February 09 2018
• Elena Popina

It was five days of high anxiety for U.S. equity investors. Here are five charts that show how bad it got.

It was five days of high anxiety for U.S. equity investors. Here are five charts that show how bad it got.

Correction Mode

The last time the S&P 500 Index had a 5 percent drop was when the U.K. voted to leave the European Union in summer 2016. It was a procession of sunny days since then -- a record 588 days without a 5 percent fall. The biggest selloff in almost seven years on Monday interrupted that streak of calm.

Big Vol is Back

A plunge in the S&P 500 of as much as 4.5 percent on Monday pushed the Cboe Volatility Index up by 116 percent, the most ever.

Volatility Blowup

As stocks went wild, two exchange-traded funds that bet on lower volatility, known under tickers XIV and SVXY, fell about 95 percent. Credit Suisse Group AG, the backer of the VelocityShares Daily Inverse VIX Short-Term ETN, said it will buy the product back.

Record Hedging

Tumbling equities triggered unprecedented hedging. Total call and put volume on the Cboe Volatility Index reached a record 4.3 million on Friday and 4.2 million on Tuesday.

Leaving SPY

The world’s largest exchange-traded fund, the SPDR S&P 500 ETF Trust, saw the biggest six-day outflow ever. Traders have yanked $25.3 billion from the product since last Thursday as the fund lost 7 percent in the span.

— With assistance by Lu Wang, and Sarah Ponczek