The market was not alert before the U.S. stock market plummeted? Abnormal VIX trend exposed, traders did not expect it

Artificial intelligence (AI)-related stocks were sold off, pushing up the VIX index, known as the "fear index". It once exceeded 28 points on Thursday (5th), setting a record since March 31. The VIX index fluctuated by more than 11 points from an intraday low to a high on Thursday, setting a record high since April 9. Whether this is an early reaction to the midterm election results or a continuation of the bear market in semiconductor stocks since hitting highs in June, foreign media pointed out that judging from the options trading on Thursday, one thing is quite clear: few traders expected this to happen.

"CNBC" reported that options trading expert Noel Smith, founder and chief investment officer of Convex Asset Management "My data tells me I should reduce risk, but my gut tells me this is a massive sell-off that could create a bargain hunting opportunity," Smith said. "I don't think it's due to general economic factors like oil prices or interest rates. Those factors basically haven't changed much. On the surface, it looks like a liquidation sell-off, and based on what I've heard from hedge funds, that's exactly what happened."

The VIX index fluctuated by more than 11 points from low to high on Thursday, but considering that the S&P 500 index fell by 3%, the market has reason to believe that the degree of volatility should be more intense. Because market traders have a rule of thumb that every 16-point change in the VIX is roughly equivalent to a 1% increase or decrease in the S&P 500 Index.

Looking back at the market reaction when semiconductor stocks encountered selling pressure on Wednesday, traders were faced with another phenomenon worth noting. At that time, technology stocks were under heavy selling pressure, and the VIX not only did not rise, but fell by more than 4 points. According to statistics from the

According to data from the Chicago Board Options Exchange (Cboe), as of noon Thursday, VIX call options (Call Options) trading volume was close to 800,000 lots, 3.5 times the average trading volume over the past 30 days.