Index Insights: May 2024

May 2024 was characterized by higher prices and lower volatility for global equities, as markets rebounded from a selloff in April to a number of new all-time highs in widely followed benchmarks, including the S&P 500 Index. Volatility was generally lower, with the Cboe Volatility Index ® (VIX® Index)" returning to the 12-14 zone after briefly approaching 20 during the prior month. Looking ahead to the balance of the year, Cboe VIX futures reflect higher implied volatility in the October term as traders price in the risk of election-related market movement.

Equity Indices

Source: Cboe Global Markets

The Russell 2000 Index® (RUT®) measures the performance of small-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 2000 securities based on a combination of their market cap and current index membership. RUT options are valuable tools for increasing yields and managing risk. The Cboe S&P 500® Index option contract (SPX), is designed to track the underlying S&P 500 Index and help investors achieve broad market protection. SPX® options offer the potential opportunity to manage large-cap U.S. equity exposure and execute risk management, hedging, asset allocation, and income generation strategies.

Volatility Indices

Source: Cboe Global Markets

The VIX Index is based on real-time prices of options on the S&P 500® Index (SPX) and is designed to reflect investors' consensus view of future (30-day) expected stock market volatility. Cboe 1-Day Volatility Index® (VIX1D Index) estimates expected volatility by aggregating the weighted prices of P.M.-settled S&P 500 Index (SPX) puts and calls over a wide range of strike prices. The Cboe 3-Month Volatility Index^SM (VIX3M) is designed to be a constant measure of 3-month implied volatility of the S&P 500® (SPX) Index options.

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