Bets On Sudden End To Market Calm Spike To Record Highs

Tyler Durden's picture

With VIX experiencing an all-tiome record period of complacency, investors are increasingly protecting against an end to the current market calm.

VIX has never...ever... traded this low for this long...

 

Which might explain the rising demand for protection against a possible snap back to reality...

As Bloomberg reports, the number of options betting on a rise in the iPath S&P 500 VIX Short-Term Futures ETN, the most-traded VIX-linked security, has surged to a record, with 17 percent more calls outstanding than puts.

Notably a large number of hedge funds added significant holdings of VXX (long VIX) to their books in Q1 (including Tiger, Passport, and Goldman)

While the VIX just posted a fourth straight week of declines, the CBOE Mid-Term Volatility Index, which tracks expectations for equity swings in the next six months, moved in the opposite direction for the first time since February.

And as a final reminder, unless "it's different this time", increased vol is on the way...

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ejmoosa's picture

It's as if everyone is waiting for the other guy to make the first move...

 

Automatic Choke's picture

If I had a nickel for every nickel I've lost on VIX calls......

spastic_colon's picture

especially VXX........its only 50-55% correlated to the VIX....the fed is prob licking their chops on this.....VIX to 3 in no time.

peopledontwanttruth's picture

That word BETS makes me think this is a casino

peopledontwanttruth's picture

The end of "The Good, the Bad and the Ugly"

Two kinds of people in this world those with loaded guns and those that dig

SloMoe's picture

Two scoops of ice cream for everyone...

black rifles are cool's picture

VXX is a useless product used to scam people who watch CNBC and Bloomberg.

spastic_colon's picture

barclay's is minting $$ with it though.....something like 10-20 million a year just as VXX sponsor.....so dont expect any enforcement