Wall Street is charging ahead with unshakable confidence. The S&P 500 has soared 35% to new record highs since April’s lows and Nvidia Corp. (NASDAQ:NVDA) has doubled in value.
But here’s what’s truly telling: traders are not hedging for a pullback—instead, they’re selling volatility, doubling down on the view that this market will keep trending calmly higher.
VIX Shorts Hit Multi-Year Extremes
Speculators have now built the largest net short position on the CBOE Volatility Index (VIX) futures since 2022, signaling a broad market belief that volatility will stay low.
According to the latest Commitment of Traders (COT) report, non-commercial traders held net short positions of -92,787 VIX futures contracts as of Aug. 19. That’s the most aggressive bet against volatility in nearly three years.
Drilling deeper, short VIX contracts have ballooned to 198,380 contracts—a level not seen since February 2021. Just four months ago in May, that figure was down to 59,248, the lowest since early 2012. Meanwhile, long positions have …