It follows that the more the Vix rallies, the more fearful traders are, and the less they are prepared to bet on its direction. Traders simply stop trading the Vix because they get anxious. Quantitative models programmed to sell in huge volumes when certain activity levels in the Vix are reached then kick in, leading to the sell-offs and volume spikes. “It is as though the market is playing some game of chicken.”
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