BofA Global Research's recent report suggests that the CBOE Volatility Index (VIX) is not fully capturing the potential for a global equity rally, driven by easing trade tensions under the new U.S. administration. The report indicates that options markets are underpricing the positive impact of tariff relief, which could lead to a coordinated global equity rally. The VIX has decreased to 13.5, reflecting a reduction in perceived market risk. BofA analysts recommend investors consider positioning for this potential rally through options, as the policy cycle is still in its early stages. This sentiment has influenced the VIX futures market, impacting instruments like the VS TR -1x Short VIX Futures ETF.
The VS TR -1x Short VIX Futures ETF (SVIX) experienced a slight decline, dropping 0.11% to $26.99 at 9:40 AM on Wednesday, January 22.