Pre-market trades blamed for record Vix surge
Traders rushed to cover short volatility positions before the market opened on August 5
The US equity volatility market witnessed one of its wildest – and arguably weirdest – swings ever on August 5.
The Cboe Volatility Index, a measure of the implied volatility of the S&P 500, surged 180% to an intraday high of 65.7 in pre-market trading that morning – the biggest one-day spike in its 30-year history – before retracing to 38.57 by the close.
The initial explanation was that the market was responding to a combination of macro catalysts: worse-than-expected US jobs data, a surprise
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