VIX Speculators raised their bearish bets for a 3rd straight week

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VIX Non-Commercial Speculator Positions:

Large volatility speculators continued to add to 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 -107,292 contracts in the data reported through Tuesday October 20th. This was a weekly change of -5,353 net contracts from the previous week which had a total of -101,939 net contracts.

The week’s net position was the result of the gross bullish position (longs) ascending by 3,579 contracts (to a weekly total of 40,542 contracts) while the gross bearish position (shorts) rose by a larger amount of 8,932 contracts for the week (to a total of 147,834 contracts).

The VIX speculators once again raised their bearish bets this week for the third straight week. Bearish positions have gained by a total of -17,535 contracts over these past three weeks and pushed the current bearish standing to the highest level since February 18th. This week also marks the second straight week where net positions have totaled over -100,000 contracts. Overall, the VIX positions have remained in bearish territory for ninety-three straight weeks, dating back to January 2020. Notably, the net position never went into a bullish position (specs betting on a higher VIX) during the COVID-19 pandemic so far.

VIX Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of 107,578 contracts on the week. This was a weekly uptick of 2,870 contracts from the total net of 104,708 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 $29.60 which was a gain of $2.72 from the previous close of $26.88, 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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