The VIX, Defying Gravity. A Peek Behind the Curtain
The VIX is pretty much color blind, it doesn’t differentiate between bullish or bearish activity. Simply put* If the market starts buying a bunch of calls (which is usually bullish), the VIX goes up…if the market starts buying a bunch of puts (which is usually a bearish trade), the VIX goes up. Over the past years it’s usually been a lot of put buying that drove the VIX higher and higher. However now, people are using options much more as a capital enhancement tool and less as a capital preservations tool. Thus people are overwriting positions more than they ever have … Read more