VIX Speculators raised their bearish bets to 34-week high

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VIX Non-Commercial Speculator Positions:

Large volatility speculators boosted their bearish net positions in the VIX futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of VIX futures, traded by large speculators and hedge funds, totaled a net position of -101,939 contracts in the data reported through Tuesday October 13th. This was a weekly change of -8,388 net contracts from the previous week which had a total of -93,551 net contracts.

The week’s net position was the result of the gross bullish position (longs) sinking by -1,907 contracts (to a weekly total of 36,963 contracts) while the gross bearish position (shorts) rose by 6,481 contracts for the week (to a total of 138,902 contracts).

VIX speculators increased their bearish positions higher this week for a second consecutive week. This rise has now pushed the overall bearish standing back over the -100,000 contract threshold and to the highest level of the past thirty-four weeks, dating back to February 18th. Despite the heavy turmoil that the coronavirus inflicted upon the markets this year, the VIX never flipped over into bullish territory as speculator positions have remained bearish now for ninety-two consecutive weeks, dating all the way back to January 8th of 2019.

VIX Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of 104,708 contracts on the week. This was a weekly advance of 9,676 contracts from the total net of 95,032 contracts reported the previous week.


VIX Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the VIX Futures (Front Month) closed at approximately $26.88 which was a decline of $-4.67 from the previous close of $31.55, according to unofficial market data.

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

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