Volatility Markets Light Up With S&P 500 Hitting Two-Month Low
- The rush to hedge means traders better positioned for turmoil
- S&P 500 hovers near 100-day average, a reliable support
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For the second time in two weeks, a selloff has sent the S&P 500 plummeting to chart levels that marked its floor for a decade. And once again there’s evidence options traders were prepared for the swoon.
The Cboe Volatility Index, or VIX, posted an outsize move. Prices for bearish options rose. Data show a taste for derivative-borne speculation easing significantly. Taken together, the signals point to creeping bearishness at the market’s edges. While hardly a vote of confidence in more equity gains, similar precautions put a brake on past routs.