Cboe Global Markets

The Week that Was: Feb. 1 to Feb 5

Kevin Davitt
February 8, 2021

A concise weekly overview of the U.S. equities and derivatives markets 

Last week (February 1 to 5), the equities markets moved sharply higher and implied/expected volatility measures were down with one-month at-the-money implied volatility of the S&P 500 at 16.1%, its lowest level since Feb. 22, 2020. Energy prices continue to move higher with West Texas Intermediate (WTI) trading at January 2020 levels of $57 per barrel.

The U.S. Senate moved closer to passing another stimulus package on Friday with Vice President Harris casting the deciding ballot in an evenly split Senate. The budget resolution now moves to the House, which will work through its details. The Non-Farm Payroll data was at 49,000, much lower than the expected 100,000. On the positive side, weekly jobless claims numbers continue to decline. The macro backdrop includes an economy on the mend, expectations for further fiscal stimulus, easy Fed policy and increased COVID-19 vaccinations.

What else is happening in the markets? A number of Microcap stocks rose last week, but the “short squeeze” dynamic from late January reversed. Stocks popular in the news, such as GME, AMC, BBBY and KOSS, were all down big for the week ending Feb. 5.

Quick Bites


  • U.S. Equity Indices reversed hard following last week’s selloff, and small caps are leading the way with the largest jump since June. The yield curve continues to steepen with inflation expectations on the rise, as well.  
  • S&P 500 Index (SPX): Rose 4.6%, posting new all-time highs. Healthcare and Financials were best performing sectors in SPX.
  • Nasdaq 100 (NDX): Up 5.2% at 3600, also posting new all-time highs.  
  • The Russell 2000 Index (RUT℠): Increased by 7.6%. U.S. Senate approval of the stimulus progress on reaching a “new normal” ostensibly benefits small cap constituency more than large caps. RUT has outperformed SPX for 5 straight months.
  • Cboe Volatility Index (VIX™ Index):  Fell from over 33 to below 21, its lowest weekly close since late Nov./early Dec. The Index has remained above 20 since Feb. 24, 2020, which is its second longest stretch ever (previously Aug. 2008 to Dec. 2009). 


  • SPX options volume averaged about 1.13 million contracts per day, down from the 1.28 million contracts of the previous week but in line with late January levels.
  • VIX options average daily volume was roughly 580,000, down from the previous week’s ADV of about 932,000 contracts, again in line with late January activity.  

Across the Pond

  • Euro Stoxx 50 Index: Up by 4.4%
  • MSCI EAFE Index (MXEA℠) is up by 2.8% and the MSCI Emerging Markets Index (MXEF℠) is up by 5.0% as Emerging Markets move to new all-time highs. Record-setting MXEF Index option volume traded in January 2021.

Charting It Out

Observations on VIX Futures Term Structure and VIX Options Volume

  • There was a dramatic shift in the VIX futures term structure last week. The chart below includes Weekly expiries.
  • The February/March spread moved from 45C inverted to 2.55 under.
  • The Month-1/Month-2 spread moved 3.00.
  • February futures fell 8.7 handles. March futures declined 5.7 handles.
  • The VIX futures curve is back in contango with March trading at a 10.5% premium to February.

VIX Futures Term Structure

Source: LiveVol Pro

  • The VIX Index has remained above 20 since Feb. 24, 2020, which is its second longest stretch ever (previously Aug. 2008 to Dec. 2009).

Consecutive VIX Index Closes Above 20 (Left) and Daily Closing Levels Since January 1990 (Right)

Source: S&P Dow Jones Indices/Cboe Global Markets

Macro Movers

  • U.S. 10-year yields moved higher last week, settling at 1.17%, the highest yield since late February of 2020 and a further sign of “normalization” in capital markets.
  • The U.S. 2-year/10-year spread is back at 107 basis points wide, its steepest since mid- 2017. 
  • Natural Gas prices came off multi-month highs ahead of a stretch of bitter cold across parts of the U.S.
  • The Gold/Silver ratio, which was at record wide of 125 in March 2020, has fallen to about 67 in February 2021. In other words, Silver has outperformed Gold by a wide margin since the height of pandemic concerns.  

Big Tech

  • Apple, Facebook, Amazon and Tesla were higher week-over-week.
  • Amazon’s cloud business is the global leader with 32% of market, following Microsoft Azure at 20%.
  • The combined annual revenue for AAPL, MSFT, AMZN and GOOGL has passed $1 trillion, more than the GDP of all but the top 16 global economies.

Largest U.S. Companies by Market Cap

Source: Compound Advisors

Tidbits from the News


  • Over the past week, there was an average of about 137,000 new COVID-19 cases per day, down from the average of 160,000 a week ago – and a decrease of 30% over the past two weeks. Very welcome progress!
  • Roughly 1.3 million people have been vaccinated daily. Infections in places like Arizona, California and Idaho have fallen dramatically, though south Texas remains a hotspot.

New Coronavirus Cases in the U.S.

Source: The New York Times

Unemployment Data

  • The January jobs data showed the unemployment rate declining to 6.3%. That measure moved from multi-decade lows of 3.5% in February 2020 to 14.8% in April 2020. The headline numbers for the past two months have been worse than expected in terms of jobs added/lost. There is an expectation that further stimulus may blunt the potential economic impact of longer-term unemployment.  

U.S. Unemployment Rate Declines

Source: St. Louis Federal Reserve

The Week Ahead

  • Earnings announcements will start to slow next week.
  • The Consumer Price Index (CPI) will be released Wednesday, along with the Federal Budget. Weekly jobless claims are expected Thursday and Consumer Sentiment on Friday. 

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The information in this article is provided for general education and information purposes only. No statements within this article should be construed as a recommendation to buy or sell a security or futures contract or to provide investment advice. Supporting documentation for any claims, comparisons, statistics or other technical data in this article is available by contacting Cboe Global Markets at www.cboe.com/Contact. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of “Characteristics and Risks of Standardized Options.” Copies are available from your broker or from The Options Clearing Corporation at 125 South Franklin Street, Suite 1200, Chicago, IL 60606 or at www.theocc.com. Cboe Volatility Index and VIX are registered trademarks and of Cboe Exchange, Inc. All other trademarks and service marks are property of their respective owners. © 2021 Cboe Exchange, Inc. All Rights Reserved.