The decline in the CBOE Volatility Index (VIX) reflects a reduction in market volatility and increased investor confidence, as evidenced by the S&P 500 Index's rise. This sentiment is bolstered by optimism surrounding US-China trade talks and a decrease in Treasury yields, which have alleviated fears of economic overheating. The VIX's trading volume was notably higher than its 30-day average, with a balanced sentiment slightly leaning towards bullishness, as indicated by the predominance of call options. The most significant trade was the VIX Feb 2025 17.000 put, suggesting some investors are positioning for further declines in volatility.
The ProShares Trust Ultra VIX Short Term Futures ETF (UVXY) experienced a decline, closing at $19.10, down 4.21% from the previous close of $19.94.