investmentwatchblog.com / BY IWB · PUBLISHED
The recent story about low readings for the spot VIX Index is well-reported. What has escaped the attention of many is that prices are now finally coming down for VIX futures at the long end of the maturity spectrum.
The spot VIX has been below 15 for most of the time since July 2016, except for a brief spike up to 22.51 on the Friday before the November 8, 2016 federal elections. Despite the spot VIX remaining low, the highest priced VIX futures contracts have been fairly steadily above 20. Usually the highest priced contracts are the farthest out expiration month contracts. Just recently, they started creeping lower, down into the 19s, then the 18s.
Something different is happening now. The current far-month contract is Oct. 2017, which closed on Feb. 15 at 17.675. That is the lowest number for the highest VIX futures contract since August 2015, just before the China-fueled mini-crash.