Investing.com - Financial Markets Worldwide

S&P, NASDAQ, DAX, Bitcoin All Down; VIX Down Too. Why?

Published 02/02/2018, 12:48 AM
Updated 07/09/2023, 06:31 AM
US500
-1.71%
VIX
16.28%

SPX, NAS, DAX, Bitcoin, VIX Chart

The equity markets are taking another hit today. Curiously, so is the VIX.

I did not record the timestamp on that snapshot but I believe it was 15 minutes or so before the close.

As of 3:03 PM the S&P rallied back towards even as did the VIX. Curious behavior to say the least.

What's Going On?

I don't know, but here are some theories.

  1. Hedge funds and pension funds doubling up on short volatility trade.
  2. Manipulation against Mr. 50-Cent VIX.
  3. Pure complacency. No one wants PUTs.

Points 1 and 3 are more likely.

Short Volatility Trades

I wrote about short volatility trades twice recently.

November 7: Expect a Volatile Future: Short-Volatility Funds Flooded With Cash

December 6: "Everyone in the Room is Selling Volatility"

"Volatility was once just a measure. Now it's an income-generating product. Everyone is selling it says Pennant Capital."

These short-volatility pension fund managers will get blown out of the water one day.

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.