Options traders are taking bearish bets against the largest VIX-linked product, which suggests they see a lower CBOE Volatility Index or are hedging long positions in volatility.

“For a change, we have witnessed put buying in iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX), which is very interesting given VXX is currently trading at or near all-time lows since the product’s inception,” says Paul Weisbruch at Street One Financial.

“Generally, we have seen upside call buyers in VXX when the options do trade in size if at all, so this is a new, and notable trend which we will have to see how it plays out,” he wrote in a note Friday.

Also, trading volume in the ETN has picked up noticeably in October.

VXX is down more than 80% the past year on a falling VIX and “contango” in the futures market. The exchange traded note is designed to replicate the performance of VIX futures. The CBOE Volatility Index is known as Wall Street’s fear gauge and tends to rise when stocks fall and investors are seeking protection in the options market.

The iPath S&P 500 VIX Short Term Futures ETN conducted a 1-for-4 reverse split earlier this month that boosted its share price after the long decline. [VIX ETF Reverse Splits]

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