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The Vix Index Might Be Getting Manipulated

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The Vix Index Might Be Getting Manipulated

(New York)

Worries are rising that the Vix index may be getting manipulated. Last week, the Vix surged 10% just moments before an auction which sets the price of derivatives, which has led many to cry foul. What is so odd about the move is that it occurred despite no corresponding move in the S&P 500, which the Vix is supposed to reflect. Apparently what moved the market was a massive purchase of options betting that the S&P 500 would fall 50% in the next month. The bet is so improbable that it appears it was placed solely to send the volatility index soaring.

FINSUM : This sounds like standard manipulation. Buy a large amount of cheap out of the money options and try to profit on the rise in the Vix. They need to look at the make up of the index, as a $2.1m options purchase should not send the Vix soaring 10%.

  • stocks
  • vix
  • volatility
  • derivatives

    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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