What’s up with the #VIX?

Among the most ac­tively traded op­tions tied to the VIX in re­cent sessions have been those tied to the gauge jump­ing to as high as 47.5 or 30, a sign that some traders are po­sition­ing for more tu­mult later this year.

…

It has now been more than three months since the S&P 500 has pulled back at least 3%, one of the longest such stretches since World War II, Deutsche Bank re­search shows. The av­er­age weekly move for the bench­mark has been less than 1% in either di­rec­tion.

…

Cor­re­la­tions within stocks haven't been this low since late 2017 and early 2018, around the time a burst of volatility known as "Vol­maged­don" jolted mar­kets. If stocks across the S&P 500 start mov­ing in lock­step once again, that would drive volatil­ity higher. 

Daily mar­ket moves might also be blunted by an in­come-gen­er­a­tion strategy that has grown on Wall Street. Investors are heavily sell­ing call con­tracts, known as over-writ­ing, to pocket premiums while giving buy­ers the right to buy shares at a specific price, by a spe­cific date. 

"There's massive, re­ally relent­less call over­writ­ing in the mar­ket right now—maybe the most ex­treme I've seen in my career," said Alex Koso­glyadov, man­ag­ing di­rector of global eq­uity de­riv­atives at Nomura. 

See the whole article on the WSJ here:

http://online.wsj.com/news/articles/WP-WSJ-0001011031

https://bit.ly/MasterFeeds