VIX surpasses 22 amid AI stock sell-off — CNBC

In the United States, the Cboe Volatility Index, known as the VIX, rose above 22 for the first time in four months due to a sell-off in shares of companies linked to artificial intelligence. At the same time, activity in the options market indicates that some traders expect the index to rise further, CNBC reports.

Bets on higher volatility

In particular, one trader bought 9,200 VIX call options with a strike price of 20 and an expiration date of November 18 for $1.7 million, as well as 12,500 contracts with a strike price of 23 for $1.1 million. These trades are a bet that the index will close above 23 by the third week of November.

SpotGamma founder Brent Kochuba noted that the rapid rise in the VIX combined with high options trading volumes may indicate the monetization of October positions and a shift by traders toward hedging against the risks of a broader market decline. According to him, several November VIX call option trades worth more than $1 million each were recorded.

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Decline in Nasdaq and CoreWeave

The Nasdaq index lost 2%, marking its worst day since June 5. CNBC linked the decline to troubles in the AI stock segment and concerns surrounding cloud services company CoreWeave, whose shares fell by 13%.

Nine of the 10 VIX contracts most frequently purchased during Friday's session were call options, and six of them had strike prices above the level to which the index fell after its initial jump. Premiums on those nine contracts reached nearly $27 million, or about 36% of all premiums traded in VIX options that day. The market expects reports from Tesla, SpaceX, and Meta next week.