Volatility Pros Say Record VIX Surge on Monday Was a Head Fake
- Wall Street’s fear gauge said to overstate the market stress
- Lack of liquidity and short covering seen fueling index spike
Traders work in the Cboe Volatility Index pit on the floor of the Cboe Global Markets Inc. building in Chicago, Illinois.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
On the surface it was a stock shock for the ages, a once-in-a-generation spike in turbulence that reverberated through global markets. But what if Monday’s extreme volatility event wasn’t quite what it seemed?
That’s the theory now bouncing around on Wall Street, after a frantic week in which the Cboe Volatility Index staged its biggest intraday jump on record.