The recent tech selloff, particularly concerns surrounding DeepSeek, has led to a significant increase in stock market volatility, as reflected by the VIX. Despite this spike, the VIX futures curve remains relatively stable, indicating that while there is immediate market uncertainty, investors are still confident in longer-term market stability. This divergence between the VIX spot and futures is typical during risk-off periods, reflecting short-term fears but a belief in eventual market stabilization. The current rise in the VIX, which measures expected short-term volatility, is more indicative of liquidity issues and wider bid-offer spreads on S&P 500 options rather than a full-blown panic.
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) experienced a notable increase, climbing 10.9% to $46.29 as of 9:00 AM on Monday, January 27.