The sideways trading has kept investors from using the VIX hedge. The most recent American Association of Individual Investors gauge reveals a “neutral” sentiment, indicating no strong opinion on where the S&P 500 will be over the next six months. After a multi-year rally, investors are beginning to shy away from large-cap stocks, turning to other asset categories and overseas equities to capture potential opportunities.

Alternatively, if the S&P 500 keeps plodding along and traders remain complacent, ETF traders can capitalize on the decline in volatility through inverse VIX options, like the VelocityShares Daily Inverse VIX Short-Term ETN (NYSEArca: XIV) and ProShares Short VIX Short-Term Futures ETF (NYSEArca: SVXY). Year-to-date, XIV jumped 30.7% and SVXY surged 30.5%.

iPath S&P 500 VIX Short Term Futures ETN

For more information on the CBOE Volatility Index, visit our VIX category.

Max Chen contributed to this article.