BofA Global Research's recent report suggests that the options market is underestimating the potential for a global equity rally, driven by easing trade tensions under the new U.S. administration. The report indicates that the CBOE Volatility Index (VIX) is not fully accounting for the positive impact of tariff relief, as evidenced by a decrease in the VIX to 13.5, down 2.3 points week-over-week. This reduction in perceived market risk comes as investors remain cautiously optimistic about the potential for a coordinated global equity rally. BofA analysts recommend positioning through options to capitalize on this potential rally, while also exploring hybrid strategies that offer significant discounts compared to traditional alternatives.
The ProShares Trust Ultra VIX Short Term Futures ETF (UVXY) experienced a slight decline, dropping 0.22% to $18.11 at 9:41 AM on Wednesday, January 22.