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VIX is reaching multi month lows today. Investors hate paying for protection. We had a conversation with a fund manager that has been in the business for long and he explained to us;
“Protection and hedges only cost me money, I am sick of paying for protection. Market never goes down”.
The guy is not alone and holds a NOT unique view on this topic.
Below chart shows the VIX versus the net non-commercial positioning. People have all piled into short VIX strategies.
Don´t be surprised to see these chart pop higher quicker than most can imagine.
Source, chart by Bloomberg