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Selloff Ignites Unprecedented Hedging as VIX Options Hit Record

Dwyer: A Correction Feels Healthy Until You Get One

Investors accustomed to shallow dips in the S&P 500 look to be losing faith.

Friday’s 2 percent rout in the benchmark for American equities pushed hedging activity to an unprecedented level. Total put and call options volume on the Cboe Volatility Index spiked to a record 3.6 million, data compiled by Bloomberg show. The fear gauge rose 29 percent to 17.32, the highest since Donald Trump’s election in November 2016.

Record Bets

Trading of VIX calls and puts surges to a peak as volatility jumps

Source: Bloomberg

The previous record for hedging activity was set on Dec. 1, with 3.1 million contracts.

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