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Shorts Pull Out of VIX Note in Bet Calm Is About to End

The calm that has prevailed in equity markets for most of the last eight months is in danger of lifting, according to speculators in an exchange-traded note tied to equity swings.

Short sellers have withdrawn from the iPath S&P 500 VIX Short-Term Futures ETN on concern the security will rise along with market turbulence. Bets against the ETN, which tracks the Chicago Board Options Exchange Volatility Index, have fallen to 25 percent of shares outstanding from a record 126 percent in February, data compiled by Markit Securities Ltd. and Bloomberg show.