In the last couple of weeks, volatility has risen sharply in global markets. The rise in volatility does not come as a surprise. As Britain prepares to vote on whether to stay in or leave the European Union (EU), market participants across the globe have been anxious. Britain votes on June 23rd. The referendum results will be declared on June 24th.
Volatility rose in the last two weeks as polls showed the Leave campaign gaining momentum. Britain’s departure from the EU could create a great deal of uncertainty. Over the weekend though, polls showed that the "Remain" campaign once again had an edge. This has calmed markets. All major markets rallied in trading today and volatility has come down significantly. Indeed, if the vote on Thursday is for staying in the EU, we could see further reduction in volatility. Given the latest poll results, that seems likely.
The Horizons BetaPro S&P 500 VIX Short Term Futures Inverse (ETF) (TSX: HVI) could post further gains in the coming days. In today’s trading, HVI is already up almost 8%. The ETF has gained more than 7% for the year. In the last five trading sessions, it has gained nearly 15%.
