VIX Poised for Plunge After Jump, If History Is Any Guide

Traders may be positioning for a return to market calm

Last week saw a resurgence of market turmoil, in U.S. equities more than anywhere else in the world as the CBOE Volatility Index surged 62 percent in three days, its biggest jump in two years. In each of the past six instances when the VIX rallied that much that quickly, the gauge plunged in the following month, slumping an average 27 percent. That might be what investors are positioning for, with an exchange-traded fund that gains when the market gets calmer recording its biggest weekly inflows since May.

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