Wall Street's 'fear gauge' punches back as the 'crash up' in chip stocks finally reverses
It's been one of the wildest stock markets on record lately but you wouldn't have known it looking at the Cboe Volatility Index. Friday's sell-off
It's been one of the wildest stock markets on record lately but you wouldn't have known it looking at the Cboe Volatility Index. Friday's sell-off just made things a lot clearer. The non-stop, two-month 80% rally in semiconductor stocks that added roughly half a trillion dollars in market cap to the Nasdaq 100, spurred one of the most successful ETF launches in history, and birthed dozens of eye-popping, parabolic single stock moves, finally hit a wall on Friday as the VanEck Semiconductor ETF (SMH) dropped almost 10% at its low.
The VIX, which had just touched the lowest level since January on Thursday, posted its biggest single-day pop since March. S&P 500 index options trading reached a record 7.8 million contracts at
Cboe on Friday, 16% higher than the previous record set in April. For many, the sell-off reads as a warning sign for speculative excess in the face of trillions of dollars in
upcoming IPO issuance and the potential for rising interest rates. For options traders who had been watching the roller coaster in single stocks, it looks more like an overdue catchup by the broader index.
The BriefWire