The CBOE Volatility Index (VIX) experienced a significant surge of 20.54% to close at 17.90, reflecting increased market volatility and uncertainty. This rise in the VIX indicates a projected 1.12% daily movement in the S&P 500 over the next month, driven by geopolitical uncertainties, including potential US restrictions on Chinese technology. The introduction of DeepSeek, an AI solution aimed at reducing operational costs for major tech firms, initially lifted market sentiment. However, the optimism was short-lived as geopolitical concerns overshadowed the positive news, contributing to the heightened volatility. The most notable trade was the VIX Mar 2025 20.000 call, with a volume of 51,089 contracts, underscoring a focus on future volatility.
The VS TR -1x Short VIX Futures ETF (SVIX) saw a sharp decline, dropping 6.24% to $25.40 by 16:40 on Monday, January 27.