{
  "id": 6181452,
  "title": "The VIX Is Playing Tricks: Why Stocks Are Volatile, But the Fear Gauge Is Sleeping",
  "url": "https://urgent.news/2026/09/06/the-vix-is-playing-tricks-why-stocks-are-volatile-but-the-fear-gauge",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-06T13:30:02.000Z",
  "source": {
    "name": "Yahoo Finance",
    "slug": "yahoo-finance",
    "url": "https://finance.yahoo.com/markets/options/articles/vix-playing-tricks-why-stocks-133002657.html"
  },
  "original_language": "en",
  "account": "The VIX, or Volatility Index, has been inexplicably falling, despite stocks appearing sluggish and volatile. Normally, a sluggish market should lead to higher volatility, but this trend is not occurring. To understand this, it's important to know how the VIX is calculated. It's a mathematical calculation derived from S&P 500 index option prices, measuring the market's expectation of 30-day price movement. When stocks are trading in a tight range, two forces suppress the VIX. Firstly, income-seeking strategies like covered-call ETFs and zero-days-to-expiration options artificially lower option premiums, driving implied volatility down. Secondly, if the S&P 500 or Nasdaq 100 fluctuates minimally daily, institutional portfolio managers resist paying inflated prices for downside protection. This reduces demand for put options, causing option pricing to collapse and consequently, the VIX. Additionally, holding VIX ETFs like VIXY or VIXM in a sideways market can be financially punishing due to the futures contracts they hold, which introduce a cost known as contango. This results in a persistent headwind for these ETFs, causing them to lose value over time. Some traders are considering inverse ETFs to bet against the market, but they find leveraged inverse ETFs like SDS as a better option. This approach allows them to move twice the opposite of SPY daily, helping mitigate the impact of a flat VIX.",
  "summary": null,
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}