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Published On: Mon, Sep 25th, 2017

As VIX Nears Record Low, Investors Have Never Been More Worried About What Happens Next

As last week ended, VIX was crushed back near record lows to ensure the S&P 500 closed above 2500 and to prove all is well in the world – despite quakes, storms, floods, nukes, and worst of all… Fed balance sheet unwind plans.

And VIX speculators have never been more short (implicitly levered long stocks)…

So why, given all this exuberance and complacency, is uncertainty around VIX's future trajectory at relative record highs?

As Bloomberg notes, renewed bets for swings in the CBOE Volatility Index have pushed the CBOE VVIX Index to a new peak relative to the VIX.

Since the ratio between the two gauges hit a record on Aug. 9, the VIX posted moves of more than 20 percent on four separate days, including a 44 percent surge on Aug. 10.

At the same time, exchange-traded products that benefit from market calm just had their biggest weekly outflows on record, while those that gain with greater stock swings gathered more money.

As Reuters reports, the long stretch of low volatility for U.S. stocks has made betting on continued calm a popular and lucrative trade, but traders and strategists warn that risks to Read Full Article

Source: Zero Hedge via Feedburner

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