VIX Trade Unwinding Sparks Market Panic, According to Nomura

Reported about 1 month ago

Recent volatility in the markets has been attributed to the unwinding of a significant Cboe Volatility Index (VIX) options trade. Nomura's Charlie McElligott reported a sharp increase in volatility as market makers struggled to hedge their positions amid a drop in equity indices, leading to heightened panic. This move was exacerbated by synthetic short gamma effects from leveraged funds, contributing to a challenging market environment. Despite this, certain investors profited from the situation, prompting discussions about ongoing market tensions.

Source: YAHOO

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