SVIX: Volatility Subsides, Trade Downgraded After Gains

The volatility of the market has subsided and trade is done after gains. According to Bloomberg finance expert Torsten Asmus, the VIX curve is moving back to contango, indicating a normalization of volatility. The SVIX, or -1x Short VIX Futures ETF, is experiencing a rating downgrade.

Market volatility has shown signs of normalization, with the VIX curve shifting back to contango. This trend, as observed by Torsten Asmus [1], indicates a stabilization of market conditions. The -1x Short VIX Futures ETF (SVIX) has experienced a rating downgrade, reflecting the changing dynamics in the volatility market.

According to Asmus, the normalization of volatility is a positive development for investors. The VIX curve, which measures the market's expectation of 30-day volatility, has been in contango, suggesting that investors are less concerned about near-term volatility. This shift is a significant indicator of market stability and can be attributed to various factors, including improved economic conditions and more predictable regulatory environments.

The SVIX ETF, which seeks to benefit from a decline in the VIX, has seen its rating downgraded. This move reflects the changing market conditions and the need for investors to reassess their exposure to volatility. The ETF's performance has been influenced by the recent stabilization of the VIX, with investors moving away from high volatility strategies.

The normalization of volatility is also reflected in the broader M&A landscape. Goldman Sachs reports that global deal values have risen by more than a fifth to around $1.9 trillion in the first half of 2025, indicating a robust recovery in dealmaking [2]. This growth is attributed to normalizing monetary and regulatory conditions, as well as greater macroeconomic clarity.

Private equity firms are also adapting to the new market conditions. Under pressure to return cash to investors, PE houses are turning to minority stake sales and structured equity to provide liquidity [2]. This strategy allows them to stay invested in assets while meeting their investors' demands for returns.

In summary, the market volatility has subsided, and the VIX curve is moving back to contango. This development is a positive sign for investors and reflects the broader normalization of market conditions. The SVIX ETF's rating downgrade and the increased M&A activity underscore the changing dynamics in the financial landscape.

References:
[1] https://seekingalpha.com/article/4802911-svix-volatility-has-subsided-trade-is-done-after-gains-rating-downgrade
[2] https://www.bloomberg.com/news/newsletters/2025-07-18/goldman-sachs-sees-m-a-in-foothills-of-five-to-seven-year-recovery