Observing where net VIX contracts are positioned can be a useful tool to see if, on balance, participants are overlay net short vol/the VIX (or not), and if a looming squeeze might be on the horizon. Today, net VIX future contracts are not overly short, at all. While the number is indeed negative/net short, it is far from what we saw at the end of 2019 – and at other recent times that preceded at a major selloff in equities/squeeze and quick rise in vol.
There are countless metrics to keep an eye on in vol land – this is merely one of them. And this one isn’t signaling an imminent spike in vol/drop in equities.
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|Chart of The Day – June 19, 2020|