The CBOE Volatility Index dropped 10% on Wednesday as markets breathed a sigh of relief after the Greek parliament voted in favor of austerity measures. The VIX, Wall Street’s fear gauge, continued to pull back and U.S. stocks marched higher for the third straight day.

However, investors may want to look beyond the VIX, which measures implied market volatility based on action in S&P 500 options contracts.

Trading in exchange traded fund options can also tell investors what markets are thinking about specific sectors. Rising implied volatility in some ETFs suggests risk in markets may be higher than what the VIX is broadcasting.

The VIX recently “may not have been much on the move but there are plenty of other asset classes and some industry sectors where the fear factor is clearly on the rise,” says Nicholas Colas, chief market strategist at ConvergEx Group. [VIX ETFs Lowballing Market Risks?]

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