VIX Options Traders Flash Major Warning Signal

With VIX at multi-year lows (a 10-handle!!) and stocks at record highs amid Trumpian (Goldman) exuberance, it appears options traders in the VIX complex are anything but "believers."

SVXY is an ETF that portends to track the inverse of VIX – in other words, as VIX drops, SVXY rises…

(ignore the decay issues for now).

So, if a trader buys Puts on SVXY, he is implicitly betting on SVXY dropping which is VIX rising and, ceteris paribus, stocks dropping.

So, despite all the hope; all the promise; all the hype; why are options traders panic-buying SVXY Puts at an extraordinary clip?

 

We are sure this is nothing right? But while the world is awash with complacency, it appears professionals have found a quiet dark corner of the markets to buy protection against the inevitable drop without Bob Pisani seeing it.

 

via http://ift.tt/2i7flwT Tyler Durden

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