Short interest in VIX soars

|By:, SA News Editor

The VIX could be coiled for a major spike the next time equities stumble, says SocGen, noting short interest in VIX futures has doubled since the end of June. "The concentrated short in the VIX futures is like a red point if you look at a map of the market, signaling potential risk,” says strategist Ramon Verastegui. A short squeeze in the VIX could spill over, he says, accelerating any downward action in equities.

The last time investors were close to being this short VIX futures was in February, just ahead of a 34% spike late in the month amid the sequester debate and Italian politics.

VIX ETFs: CVOL, VXX, VIIX, VXZ, VIIZ, TVIX, TVIZ, XXV, XIV, ZIV, XVIX, VQT, VIXY, VIXM, XVZ, IVOP, UVXY, SVXY.