Whether this is some kind of "referendum" on the mid-term elections, or merely a continuation of the semiconductor bear market since the sector peaked in June, Thursday's options trading made one thing clear: almost no traders anticipated such a trend.

This is reflected in the surge of the Chicago Board Options Exchange Volatility Index ( Cboe Volatility Index, VIX ). About 90 minutes after the market opened on Thursday, VIX rose by 5.7 points, reaching above 28. This level is the highest reading since March 31; March 31 was the day after the S&P 500 completed a sell-off and hit a bottom following the peak in tensions between Iran, Israel, and the United States.

From the low point to the high point during trading on Thursday, VIX fluctuated by more than 11 points, recording the largest single-day fluctuation since April 9th. Although the S&P 500 fell by 3% that day, some believe that the volatility should have been even higher. Traders generally follow an empirical rule: VIX for every 16 points of fluctuation, it is roughly equivalent to a 1% fluctuation in the index.

The S&P 500 was on its way to record its worst single-day decline since April 2025.

Noel Smith ( Noel Smith ) said, "My data tells me that I should reduce my risk, but my intuition is that this is a violent sell-off that could create an opportunity to buy on dips. I can't see any macroeconomic factors causing this, such as oil prices or interest rates. These factors have remained relatively unchanged. The market looks like it's in a liquidation sell-off, and from what I've heard from hedge funds, that's exactly what it is."

Judging from the market reaction after the semiconductor sector declined on Wednesday, traders are faced with another question: while tech stocks suffered a heavy blow on Wednesday, VIX seemed unusually calm. According to data cited by account X “OddStats”, on the day that VanEck semiconductors ETF fell by 3%, VIX also fell by more than 4 points, which is the first time such a situation has occurred in market history.

As of noon, approximately 800,000 VIX call options were traded. According to Cboe data, this trading volume is 3.5 times the 30-day average.