Options market still searching for cause of the Vix plunge

BIS paper blames yield-enhancing structured products, but market participants are unconvinced

Credit: Risk.net montage

A fierce debate is flaring over whether popular retail investment products are artificially suppressing the Cboe Volatility Index, known as the Vix, which measures the implied 30-day volatility of the S&P 500.  

A paper published by the Bank for International Settlements on March 4 blames yield-enhancing structured products that sell options against long stock positions for depressing the Vix, which has defied geopolitical tensions and recession fears to average 13.5 this year compared to a

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