VIX drops 15% to lowest level in three months

The VIX, or volatility index, sunk 15% to its lowest level in three months yesterday as European leaders announced plans to alleviate the debt crisis.

It dropped to 25.46 as traders' concerns over the eurozone debt crisis eased. Although the index has fallen below 30 in the past two weeks, yesterday was the first time futures traders bet the index would not go back above that level in the next eight months. On 8 August the VIX jumped to 48, its highest level since March 2009, following the downgrade of the US's credit rating from AAA. The Chicago Board Options Exchange Volatility Index for March through June also plunged 8.7% in the past two days, the biggest drop on record, according to Bloomberg. Europe's VStoxx Index (V2X), wh...