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 broad-based equity uplift. Despite a decrease in the VIX to 13.5, down 2.3 points week-over-week, the market remains cautiously optimistic. BofA analysts recommend investors consider positioning for a coordinated global equity rally through options, as the policy cycle is still in its early stages.
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) experienced minimal movement, inching up 0.02% to $42.12 at 9:40 AM on Wednesday, January 22.