‘Wall Street’s fear gauge’ VIX surges 23%... Options market: “More gains ahead”
- Input
- 2026-10-17 05:12:16
- Updated
- 2026-10-17 05:12:16
As the New York stock market suddenly turned bearish, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s “fear gauge,” surged more than 23% on the 16th (local time). It shot past the psychological resistance level of 20 in an instant.
Experts are concerned that the VIX will rise further. This reflects expectations that the New York stock market will face extreme volatility through the middle of next month.
According to Yahoo Finance, the VIX surged to 22.31 intraday.
CNBC reported that this was the first time the index had topped 22 in four months, and that traders expected it to climb further.
Options market activity also bears out expectations that the fear gauge will rise further. Investors are buying VIX call options that pay off if the index stays elevated through November. A call option gives the holder the right to buy at a predetermined price.
According to CNBC, one trader bought 9,200 call options with a strike price of $20, expiring on the 18th of next month, for $1.7 million, and 12,500 call options with a strike price of $23 for $1.1 million. An expiration date of November 18 and a strike price of $23 indicate a bet that the VIX will remain above 23 until after the middle of next month.
Brent Kochuba, founder of SpotGamma, noted, “Today’s rise in the VIX, alongside the increase in VIX options trading volume, means traders are massively unwinding their October VIX positions and preparing for a steeper market decline.”
As cracks appeared in the artificial intelligence (AI) theme and fears surrounding neocloud leader CoreWeave spread, the Nasdaq Composite plunged 2% that day, its biggest one-day drop since June 5. CoreWeave plunged 13%.
Nine of the 10 most heavily purchased VIX options contracts in the options market that day were call options betting on a rise. Six of them had higher strike prices. This suggests traders expect the VIX, after stabilizing and initially falling following its initial spike, to surge again and break above these higher strike prices. The VIX surged as much as 35% from the previous close to 22.31, then pared some of its gains to stand at 20.22, still up 24%.
[email protected] Song Kyung-jae Reporter