Volatility was the Winner for Stocks (Nov 1st)

Today was another horrible day for stocks with the Dow Jones shedding almost 300 points and the S&P 500 losing 2.79%.  The big winner today was the iPath S&P 500 VIX Short-Term Futures ETN (VXX) which increased 26%, adding $9.66 to close at $45.92 a share.

Stocks were crushed today by the uncertainty in the European Union putting last week's deal under fire as Greece flip flops on their debt arrangement.

The Volatility Index (VIX), also known as the "Fear Index" came back into focus today increasing 22% in 24 hours.  The Volatility Index is based on data collected by the Chicago Board Options Exchange. Each day, the CBOE calculates a number based on prices paid for puts and calls for the S&P 500. This number gives traders an idea of the implied volatility in the market for 30 days.   The VIX closed just below 35 today.

A direct investment in VIX (commonly referred to as spot VIX) is not possible. The S&P 500 VIX Short-Term Futures ETN (NYSE:VXX) holds VIX futures contracts, which could involve roll costs and exhibit different risk and return characteristics.

Bottom line: Fear in the market equates to gains in the VXX.

CHARTS FOR THE VXX