VIX Traders Bet on Rising Volatility After Year of Calm
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Options tied to gains in the benchmark gauge for American stock volatility reached the highest prices in six years last week, reflecting bets that the calm prevailing in equities for the last year won’t last.
A series of calls that appreciate in tandem with the Chicago Board Options Exchange Volatility Index climbed to the highest since May 2007 relative to puts, according to data compiled by Bloomberg. The increase reflects bets that swings measured by the VIX will widen this year after the Standard & Poor’s 500 Index rose 30 percent in 2013 without ever suffering a decline of 10 percent or more.