The recent surge in VIX call buying has highlighted traders' anticipation of increased market volatility amid significant events such as Donald Trump's tariff and immigration comments, the FOMC rate decision, and a busy earnings week. This heightened demand for volatility hedges, as indicated by increased open interest in VIX calls, suggests that market participants were bracing for turbulence. Despite the initial spike in the VIX to 22 overnight, the index has since retreated, pointing to a potential stabilization in market sentiment. Brent Kochuba from SpotGamma noted the presence of 0DTE put selling in the S&P 500, indicating traders' bets on reduced downside risk and a possible market rebound.
The iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) experienced a notable increase, rising 7.62% to $44.92 by 12:00 PM on Monday, January 27.