VIX finished the week down almost 13% at 11.47. This closing price was only 0.17 higher than the 2014 low of 11.30. Do keep in mind that the 11.30 deserves some sort of asterisk as it came Thursday before the 3 ½ day Independence Day holiday. If the S&P 500 moves up this coming week we could easily see VIX with a 10 handle for the first time since before the 2008 crisis.
The lack of downside moves in the various VIX futures can be excused or taken as a signal. The excuse is that the spread between the futures and VIX was not wide enough so the drop in VIX put things closer to ‘normal’. The signal may be that volatility traders expect ‘something’ to cause a move up in VIX in the next few weeks. That ‘something’ can be any number of potential problems that are smoldering around the world.
A final reminder that this Monday, Tuesday, and Wednesday The Options Institute will be offering three webinars introducing VIX, covering VIX options and futures, and showing various strategies that may be implemented based on your VIX outlook. More info – www.cboe.com/webcasts