January 2026

Over the first month of the year, equity market implied volatility soared despite an increase in U.S. equity prices. The price of the near-dated VIX future contract jumped 18.1 percent to 19.0, even though the near-dated E-Mini S&P 500 futures contract ended the month up 0.95 percent. The increase in volatility largely took place on January 20 when U.S. President Trump, speaking at a press meeting, raised the possibility of taking Greenland by force. The next day, this threat was rescinded, and equity markets rebounded. However, investor uncertainty remained. The price of the near-dated VIX future ended the month slightly higher, at 19.6.

Losses on short VIX futures positions were partially offset by holdings of longer-dated VIX contracts and a short exposure to the S&P 500 futures contract. Nevertheless, the trading program declined 4.62 percent during the first month of the year.