VIX Call-Put Ratio Hits Highest Since July 2025 as Investors Seek Downside Protection
Open interest in VIX call options relative to puts has climbed to ~3.1, the highest since July 2025 and the second-highest since February 2025. Meanwhile, the spread between VIX and S&P 500 20-day realized volatility has narrowed to near zero, making volatility protection historically cheap.
Traders are piling into upside bets on the Cboe Volatility Index (VIX) at the highest ratio in months. The put-call ratio for VIX options -- the number of calls relative to puts -- has risen to about 3.1, marking the highest level since July 2025 and the second-highest since February 2025, just before the last major market correction.
At the same time, the gap between the VIX and the S&P 500's 20-day realized volatility has narrowed to roughly zero. This is the second-lowest reading in at least two years, indicating that protection against a potential market selloff remains historically inexpensive.
In other words, traders are positioning for a volatility spike at a 3-to-1 ratio versus a decline, even as the actual cost of hedging stays cheap. The data suggests investors are bracing for increased market turbulence ahead.
Source: The Kobeissi Letter