Traders Pile Into Bets on VIX Soaring to 50 as Fed Risks Mount
- VIX 50 April calls traded 50,000 times on Wednesday morning
- Index hasn’t traded near that level since the spring of 2020
Traders are making big bets on stock market turbulence as the S&P 500 Index retreats from its record high and investors wonder when, not if, the Federal Reserve will start cutting interest rates.
An hour after trading started on Wednesday, a trader appeared to buy 50,000 call options betting VIX Index could jump toward 50 by April, a level last seen during the pandemic. The cost was relatively cheap — 20 cents for each — and hedged, which enables the buyer to profit from far smaller ripples in the market.