
Whistleblower alleges manipulation in the VIX fear gauge - wslh
https://www.cnbc.com/2018/02/13/whistleblower-alleges-manipulation-in-the-vix-fear-gauge-urges-regulators-to-investigate.html
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hidenotslide
Why wait until the end to point out that this letter is most likely nonsense?
Seems unlikely that people are getting scammed out of hundreds of million
dollars a month.

I tracked down the actual letter here and confirmed it has all sorts of stupid
stuff in it.
[https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r8LCxXQ4...](https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/r8LCxXQ4CfqU/v0)

Repeatedly blames the CME, which has nothing to do with the VIX. Losses to
investors of trillions in a week, what? The mechanism they describe is that
the indicative VIX value is affected by option orders (true) and this somehow
affects VIX futures (I'm skeptical). The only time this index affects VIX
futures directly is during settlement, and the only example they provide
totally mangles the definition of implied volatility.

Furthermore, they are complaining about someone posting a 0.35 executable bid
in a illiquid market where the offer price is oscillating between 1.40 and
9.80. Doesn't seem sinister considering far out of the money options are known
to be illiquid.

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OscarCunningham
>A Cboe spokesman told CNBC: "We take our regulatory responsibilities and the
oversight of our markets very seriously. This letter is replete with
inaccurate statements, misconceptions and factual errors, including a
fundamental misunderstanding of the relationship between the VIX Index, VIX
futures and volatility ETPs, among other things. As a result of these errors,
we feel the conclusionary statements contained in this letter lack
credibility."

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Beltiras
A brokerage made a bet against the VIX[1]. Was on HN several days ago [2].

[1] [http://fortune.com/2018/02/10/vix-index-hedge-fund-
colorado/](http://fortune.com/2018/02/10/vix-index-hedge-fund-colorado/)

[2]
[https://news.ycombinator.com/item?id=16346175](https://news.ycombinator.com/item?id=16346175)

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Forrest7778
Their allegations don't explain volpacolypse though, which is the really
interesting and somewhat of a gray swan scenario.

Also, those rumors (people manipulating VIX near expiration dates) have been
circulating for a while now and CBOE has denied all of them.

I'm mostly interested to see what the SEC makes of it all and if there will be
any indictments made, but I honestly doubt that there will be.

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paulpauper
The manipulation was not with the vix. it may have been with the vix futures
that caused XIV and SVXY to fall so much . Vix and vix futures not the same
thing.

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nstj
This article is old news - it's from a week ago.

