This morning, as I perused my twitter feed that is dedicated to VIX I came across two tweets highlighting the chart below.  Basically, these tweets were noting the high absolute level of Non-Commercial VIX futures short interest that appeared in the CFTC Commitment of Traders (COT) report from last week.  The net position for Non-Commercial VIX futures traders was -174,665, an all-time low.  This figure has some VIX commentators noting a rise in VIX and VIX futures may cause some panicked buying or a short squeeze.  However, looking at this figure in context of the whole market tells a different story.

VIX COT 1
Chart Data Source: www.cftc.gov


This second chart takes the Non-Commercial net VIX futures position and divides it into VIX Futures Open Interest.  Note things aren’t as dramatic when we look at this Non-Commercial short position in the context of the whole market.  For the number centric readers, the Non-Commercial short positions in VIX futures was 25.8% of the open interest which in the case of a rise in VIX is probably a manageable number.  

VIX COT 2

Chart Data Source:  www.cftc.gov