“Seeing the VIX at 50 was just chaotic,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co., told Bloomberg. “It’s not like there was a headline that a bank had filed for bankruptcy or a major corporation was teetering on the brink. Why did it move that much?”
The buying pressure in inverse VIX ETPs during the height of the recent VIX spike suggests that some investors saw the pullback as a response to panic selling, which could quickly turn around.
CBOE Holdings also recently stated that the volatile August boosted contract trading volumes to record highs, MarketWatch reports. August 21 was the CBOE’s busiest day ever, with 11.2 million contracts traded, and options for the VIX set a new average daily volume record of just under 1 million contracts.
The VIX was down 2.2% Thursday, trading around 25.5. While the VIX has edged lower over the past week, the volatility index was still trading above its historical range of 15 to 20 and well above its lows about about 12 earlier this year.
For more information on the CBOE Volatility Index, visit our VIX category.
Max Chen contributed to this article.