Vix vulnerable to retail short squeeze, analysts warn

Volatility products could see more wild swings as dearth of vol sellers exacerbates spikes

Targeting-Vix

After last month’s bizarre rally in GameStop, analysts are fretting about a highly unusual move in the volatility markets that could foreshadow further market shocks.

On January 27, when GameStop shares more than doubled to close at nearly $348, the Vix index of S&P 500 options volatility jumped nearly 75% after opening at 23.02 points to end at 37.21. 

According to analysts at Bank of America, this was the sixth-largest Vix move in points terms since 1990 and was historically outsized

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