1.In Textbook Fashion…Street was Max Short Volatility Before Yesterday’s 84% VIX Spike.
The stock market is finally getting a long-awaited bout of volatility. The Cboe Volatility Index — or VIX — spiked 84% on the day, its biggest single-day increase of all time, according to data going back to 1990. The VIX reflects expectations for volatility in the S&P 500, and trades inversely to the benchmark roughly 80% of the time.
The Ultimate “Pain Trade” as the street was max short Volin the latest FMS form BofA. Margin Clerks ramped hard at 2:30-3pm today. Twits saying “8M SPY options trading on the day after more than 7M on Friday” – @OptionsHawk replied “Highest marks in over 2 years…when everyone finally starts buying protection, we tend to be close to a bottom (June ’16, Nov. ’16, Aug ’17)”
Chart from Dave Lutz at Jones
