INSUBCONTINENT EXCLUSIVE:
By Yakob PeterseilThe Cboe Volatility Index surged to the highest since 2008 on Monday as a plunge in oil prices frazzled traders already on
edge over the coronavirus.
The VIX, which measures the 30-day implied volatility of the S-P 500 based on out-of-the-money options prices,
jumped as high as 62, its highest level since December 2008 on an intraday level.
The S-P 500 fell 7% at the open, triggering a trading halt
the New York Stock Exchange put in place after the 1987 Black Monday crash
New York time, after a delayed opening for S-P 500 products.
BloombergThe VIX was already clocking eye-watering levels last week, as stocks
were whipsawed by virus headlines
On Friday, it surpassed 50, a threshold last breached when the complex broke down in February 2018
Net speculative positioning in futures on the VIX still flashed short as of Tuesday, hours after the Fed made its emergency rate cuts,
biggest short-volatility exchange-traded product, adding $233.5 million over the past six sessions
While inflows into the ProShares Short VIX Short-Term Futures ETF typically reflect bets that calm will break out, they may also be part of
a hedging strategy or create-to-lend activity.
Either way, anyone who had bet on market calm this week looks set for a world of pain.
