VIX jumps above 28, its biggest one-day move since April 9, as S&P 500 slides 3%
The Cboe Volatility Index rose as much as 5.7 points to above 28 on Thursday, its highest reading since March 31, while the S&P 500 fell 3%.
At a glance
- The VIX rose as much as 5.7 points to above 28 on Thursday, its highest reading since March 31.
- The S&P 500 fell 3% and was headed for its worst decline since April 2025.
- Traders use a rule of thumb that 16 VIX points equate to a 1% move in the index, suggesting volatility could be higher.
The Cboe Volatility Index (VIX), Wall Street's widely watched fear gauge, jumped as much as 5.7 points to above 28 about 90 minutes after Thursday's opening bell — its highest reading since March 31 — as the S&P 500 fell 3% and headed for its worst decline since April 2025.
From its intraday low to high, the VIX moved more than 11 points, the biggest one-day move since April 9. The last time the index reached this level, on March 31, came the day after the S&P 500 bottomed following a selloff driven by tensions between Iran, Israel and the United States.
A move few saw coming
Whether the session amounted to a referendum on the midterms or simply a continuation of a bear market in semiconductors dating back to the group's peak in June, the options action suggested few traders anticipated it, CNBC reported.
Why some argue volatility should be higher
Traders use a rule of thumb that 16 points on the VIX equate to a 1% move in the S&P 500. With the index down 3% on the day, there is an argument that volatility should be higher than it is.
'A liquidation'
Noel Smith said his data pointed to de-risking, but that the move could also set up a buying opportunity.
"My data says to de-risk, but my gut says this is a blowout that could create a dip-buying opportunity," he said.
Smith added that he did not see macroeconomic drivers such as oil or rates behind the drop. "Those things are relatively unchanged. The tape looks like a liquidation and that's exactly what it is according to what I'm hearing with regards to a hedge fund," he said.
Unusual options activity
Wednesday's response to a selloff in semiconductors added a wrinkle for traders. With the VanEck Semiconductor ETF down 3%, it was the first day in market history that the VIX concurrently fell more than 4 points, according to data from the X account "OddStats."
By midday Thursday, nearly 800,000 calls had traded on the VIX, 3.5 times higher than its 30-day average, according to Cboe data.
Source: CNBC.
Questions and answers
- What is the VIX and why did it surge on Thursday?
- The Cboe Volatility Index, known as Wall Street's fear gauge, jumped as much as 5.7 points to above 28, its highest reading since March 31. The move came as the S&P 500 fell 3%.
- Why do some traders think the VIX should be even higher?
- Traders use a rule of thumb that 16 points on the VIX equate to a 1% move in the S&P 500. With the index down 3%, volatility would be expected to be higher than it is.
- What did Noel Smith say about the selloff?
- Smith said his data pointed to de-risking but his gut suggested a possible dip-buying opportunity, adding that oil and rates were relatively unchanged and the tape looked like a liquidation.
