With VIX experiencing an all-tiome record period of complacency, investors are increasingly protecting against an end to the current market calm.
VIX has never...ever... traded this low for this long...
Which might explain the rising demand for protection against a possible snap back to reality...
As Bloomberg reports, the number of options betting on a rise in the iPath S&P 500 VIX Short-Term Futures ETN, the most-traded VIX-linked security, has surged to a record, with 17 percent more calls outstanding than puts.
Notably a large number of hedge funds added significant holdings of VXX (long VIX) to their books in Q1 (including Tiger, Passport, and Goldman)
While the VIX just posted a fourth straight week of declines, the CBOE Mid-Term Volatility Index, which tracks expectations for equity swings in the next six months, moved in the opposite direction for the first time since February.
And as a final reminder, unless "it's different this time", increased vol is on the way...