Against the backdrop of record highs in stocks, volatility is almost gone. Hedge funds are beginning to bet that peace will last for a long time. They are shortening the VIX index at an unprecedented rate of 15 years.
The big speculators, especially the funds, were short net with around 178,000 futures on April 23, the biggest ever record. Aggressive positioning against VIX (also known as the Fear Index) shows the general mood - fright or confidence.
But lately, strategists believe that VIX does not provide such good and useful information about the positioning and mood of market participants.
Source: Bloomberg Finance L.P.
Graphs: Used with permission of Bloomberg Finance L.P.
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