The VIX Is at a Two-Year Low, But Volatility Trading Is Surging
- Volume of futures and ETNs betting on swings jumps to record
- Volatility isn’t pricing in Europe vote risks, strategists say
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The VIX is trading near depths last seen in 2014, but that doesn’t mean the equity-volatility market is laying low.
Investors are piling into securities from futures to exchange-traded notes betting on stock swings, even as the CBOE Volatility Index heads for its biggest annual decline since 2009. A gauge tracking expectations for turbulence in the next three months hit the highest level since August 2012 relative to the VIX, which measures bets for the coming month. Among themes that strategists recommend hedging for in 2017: a new administration in the U.S. and elections in Europe.