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Actionable news in TVIX: VELOCITYSHARES DAILY 2X VIX SHORT TERM ETN,

Traders Brace for Comeback of Volatility

  • Central banks in tightening mode seen as trigger for swings
  • ETPs show traders are more long than short volatility

As a much-vaunted Trump reflation trade fizzled and the U.S. president found himself embroiled in controversy, the big market surprise in the first half was that volatility actually fell.

Traders who shorted the VIX saw their bets pay off as the gauge plunged 20 percent, taking its quarterly average to the lowest level since 2006. The question is, how long can it last?

JPMorgan Chase & Co. is warning of more market turbulence as the European Central Bank and Bank of Japan begin paring their economic stimulus, while Goldman Sachs Group Inc. says net positions in exchange-traded products favor long bets on volatility over short. In other words, investors are bracing for less stable times...


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