Why the VIX at 16 Is a Trap for Dip Buyers

The VIX has dropped below 16 for the first time in months, and the S&P 500 just hit a fresh all-time high above 7,400. But Lucas and Luna argue that the calm might be deceptive. They examine the divergence between the VIX and VVIX—the volatility of volatility—and explain why a low VIX can actually signal elevated tail risk. Drawing on the current yield curve steepening (the 10-year minus 2-year spread hit 35 basis points) and recent patterns in options positioning, they make the case that buying the dip now is different than in 2023. This episode offers a concrete framework for distinguishing between structural calm and dangerous calm, and why the VVIX may be a better gauge for the next six months. #VIX #VVIX #Volatility #DipBuying #TailRisk #YieldCurve #OptionsStrategy #S&P500 #BearMarket #FexingoBusiness #BusinessPodcast #Finance #Investing #MarketStructure #RiskManagement #VolatilityOfVolatility #CalmBeforeStorm #LucasAndLuna Keep every episode free: buymeacoffee.com/fexingo