02/10/17

"Dancing On The Rim Of A Volcano": Speculators Have Never Been More Short Volatility



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"Dancing On The Rim Of A Volcano": Speculators Have Never Been More Short Volatility
// Zero Hedge

With VIX ending Friday at its lowest weekly close ever, lowest monthly close ever, and lowest quarterly close ever - after the quietest September stock market in history - SocGen warned last Friday that the current situation is a "dangerous volatility regime" citing the strong mean-reverting tendency of uncertainty as a big reason for investors to brace themselves for trouble ahead.

Of course, judging by the new record short in VIX futures - extending last week's surge - the speculative public is as levered-long and complacent as it has ever been...

What could go wrong? SocGen's Arthur van Slooten explained late last week: "compare that with dancing on the rim of a volcano. If there is a sudden eruption (of volatility) you get badly burned"

Indeed, if CNN's Fear and Greed Index is anything to go by, investors are close to the 'most extreme' levels of greed in history...

However, it's not just volatility that is ...

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