The VIX swung more than 11 points between its intraday low and high on Thursday. Biggest one-day move since April 9.
Traders say it should be higher. Think about that. The fear gauge jumped like a cat near a cucumber, and professionals looked at it and said, "Could use more."
That is not analysis. That is a hostage situation with a Bloomberg terminal.
I draw lines on charts. Lines do not read headlines. Lines do not care that April 9 was the last time everyone screamed at once. Lines just sit there, being right.
You, meanwhile, bought a volatility product because the ticker looked like a fun word. You do not know about contango. You do not know about decay. You know the number went up and you felt something, and that feeling was a margin call in a trench coat.
The VIX is a measure of expected 30-day swings in the S&P 500, derived from options prices. It is not a mood ring. It is a price people pay for insurance. Thursday, the insurance got expensive and a bunch of people who skipped the insurance suddenly wanted it. Classic. Nobody buys a fire extinguisher while the curtains are burning, except you, at full price.
"Should be even higher" is the kind of sentence that only exists in finance. In any other field, a number doubling its daily range and someone saying "still too calm" gets you escorted out of the building.
I do not know why the VIX moved. Neither do you. Neither does the guy on TV pointing at a red arrow like it owes him money. The chart moved. The chart is the only witness, and it is not talking.
Your portfolio had a very bad day, and a number called the fear gauge says you were not scared enough.
Photo by Patrick Weissenberger on Unsplash
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