Investors are ramping up their bets on market turbulence, with positions tied to the CBOE Volatility Index (VIX) hitting levels not seen in years. 

Specifically, net dealer long positions in VIX futures have surged to about 87,000 contracts, the highest in at least four years, according to the Commodity Futures Trading Commission (CFTC) as cited by The Kobeissi Letter on September 30.

The sharp increase partly reflects a rush into exchange-traded products designed to profit from volatility spikes. 

Notably, the S&P 500 VIX Short-Term Futures ETN (VXX), the largest fund tracking VIX performance, has seen assets balloon by more than 312% over the past year to roughly $1 billion. 

Similarly, the 2x leveraged long VIX futures ETF (UVIX) has recorded a 215% surge in inflows.

Overall, dealer positions have climbed steadily since early 2025, reversing a period of net short exposure and now standing firmly in positive territory. 

This shift suggests that investors are actively seeking protection against potential market shocks, forcing dealers to hedge by taking on additional long exposure in futures contracts.

Record-high stock market 

The buildup of positions comes at a time when equity markets remain at record highs but are increasingly vulnerable to macroeconomic uncertainty, rising geopolitical tensions, and shifting monetary policy. 

While this doesn’t guarantee an imminent volatility spike, it signals that risk appetite is weakening beneath the surface. 

For dealers, who take the opposite side of the trade, the surge in long exposure underscores how concentrated the demand for hedges has become.

At the same time, indices such as the S&P 500 have hit new highs, with Wall Street staying broadly bullish in the near term. 

Some analysts project the benchmark could climb above 7,000 within the next year. Yet this momentum persists amid lingering concerns of a potential market correction, with risks tied to elevated stock valuations, particularly among major technology players, and the possibility of a recession.

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