The increased bets on the VIX come even after the volatility index remains stuck well below statistical thresholds that go back two decades, according to FactSet data. While the risk-on attitude is ramping up, the calm may be deceiving.

Volatility “usually doesn’t happen when people are expecting it,” Tigay added.

“There’s too much complacency” in U.S. markets, Vincent Chailley, chief investment officer at London-based H2O Asset Management, told the WSJ. “Any bad surprise from Mr. Trump means there’s a little to make but a lot to lose.”

Additionally, another signal that suggests a potential reversal is the crowded trade on betting on falling volatility. Hedge funds and other large speculators raised net short positions on the VIX to the largest level since September 6, betting on lower volatility or continued equity market momentum.

“When you have such short net positions in the market, it’s considered a red flag for the volatility market,” Ramon Verastegui, managing director at Société Générale, told the WSJ.

The accumulated short positions can lead to a short squeeze, Verastegui warned. “If you have a small spike in volatility, [volatility]can potentially move up really, really quickly.”

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