Options Activity in ‘Fear Gauge’ Spikes as U.S. Stocks Sink
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October’s living up to its reputation as a volatile month for equities. Trading activity in options linked to the stock market’s so-called fear gauge spiked as the S&P 500 Index was poised for its longest losing streak since U.S. President Donald Trump’s election win.
VIX options are tied to the Cboe Volatility Index, a measure of traders’ expectations for swings in the benchmark U.S. equity gauge. Volume has averaged more than 1 million a day over the four sessions ended Tuesday. That’s the most since February, which saw a record one-day spike in volatility and felled a number of exchange-traded funds that let retail investors bet on enduring market calm. The VIX, which has averaged about 14 over the past year, rose above 18 Wednesday.