According to CNBC, the Cboe Volatility Index (VIX) rose above 22 for the first time in four months as AI-related stocks sold off. One trader bought 9,200 November 18 20-strike calls for $1.7 million and 12,500 November 18 23-strike calls for $1.1 million, betting the VIX will close above 23 by the third week of November. Brent Kochuba, founder of SpotGamma, said the VIX’s rapid rise and elevated options volume indicated traders were monetizing October positions and shifting hedges toward protection against a larger market downturn. Nine of the 10 most popular VIX contracts bought in Friday’s session were calls, including six with strike prices above the level the index reached after its initial spike. Those nine contracts accounted for nearly $27 million in premium, about 36% of the day’s total VIX options premium. The Nasdaq fell 2%, its worst day since June 5th, while CoreWeave lost 13%. Tesla, SpaceX and Meta are scheduled to report earnings next week.$TSMB
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