PREVIEW

... XX index surged from 19.4 to 38.7.

The VSTOXX is known as the “fear index” that reflects volatility in the European markets.

Typically, a reading above 30 indicates panic, and above 50 suggests a financial crisis. And now, it's at 38.7.

—Would you say the market is in a state of panic?

—No, not exactly. This spike was driven by an extreme surge in retail investors buying put options. Their preference for “deep out-of-the-money” options inevitably drives up volatil ...

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