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Source: Common Domain

How Wall Street’s ‘fear gauge’ is being rigged, according to one whistleblower

Wednesday 18:15 GMT

The VIX has underpinned a number of strategies described as so-called short-volatility, which imploded dramatically last Monday when VIX, also known as Wall Street’s fear gauge, registered its largest percentage change in its history, cratering bets that volatility measures would fall, if not remain muted.

Non-institutional holders of these ETPs  were approximately 21% of total holdings in the last reported period, he said, with the remainder consisting of “sophisticated institutional users who employ inverse VIX ETPs as part of a diverse mix  of trading and investing strategies.”

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