Silver as an investment

VIX ETF Smashes All Records

For the first time in history, yesterday saw VXX (the VIX ETF) traded more volume than the most-traded stock in the S&P 500. With speculative positioning at record shorts (extreme levered long stocks) and volume soaring beyond Aug 2015's previous record, we suspect this will not end well…

As Bloomberg reports, for the first time on record, the iPath S&P 500 VIX Short-Term Futures ETN recorded more volume on Tuesday than any company in the S&P 500 Index, with a record 110 million shares changing hands. The closest was Bank of America Corp., with 89.3 million shares trading. The note slipped 3.1 percent on Wednesday as the S&P 500 Index rebounded.

“The herd mentality is leading investors to what seems popular,” Channing Smith, a managing director at Capital Advisors Inc. in Tulsa, Oklahoma, said by phone. The firm oversees about $1.7 billion. “People have talked about how we’re due for this selloff, whether or not that’s justified, they see opportunities in making quick bucks.”

 

Volatility-linked securities accounted for three out of the top 10 most-traded exchange-traded products on Tuesday as the S&P 500 suffered its second decline of more than 1.4 percent in three days, a resurfacing of volatility that ranks with the most violent on record.

It's official, the leveraged derivative tail is wagging the entire US equity market dog…

 

But, as we noted previously, something yuuge is happening in the VIX complex…

 

And don't forget, everyone is on the same side of the boat again… As stocks go higher and vol goes lower, leverage speculative positioning is just chasing that trend adding to already record extreme positioning…

 

And S&P Large Speculators just hit its hghest since 2013…

 

"it's probably nothing…"