A massive trade in the U.S. options market on Thursday appears to be betting that the calm enveloping U.S. stocks in recent weeks will give way to a big rise in volatility over the next three months.
One or more traders laid out a roughly $40 million bet that the Cboe Volatility Index – often called Wall Street’s fear gauge – will break above the 25 level and rise towards 40 by mid-July, trading data showed Thursday.
The VIX closed at 16.95 on Thursday, its lowest close since February 20, 2020, just before the coronavirus pandemic spooked investors and roiled global financial markets.