VIX is off .65 to 13.64, hit a low of 13.32, and is making a move below its March 16 intraday low of 13.66. The volatility index is falling to its lowest levels in over five years, as the S&P 500 trades in a very narrow three-point range on expiration Friday. Trading in the VIX pit is relatively active, with 195K calls and 92K puts traded so far. Sep 28 and 23 calls are the most actives, as some players might be anticipating a rebound in the index before the Sept expiration. 30 percent of the flow, or 86K contracts, is in the August options that expire in 4 days....MOREAnd from ZeroHedge:
Why VIX Is So Low, And What Comes Next?
...The bottom-line is that a low VIX must be compared to its realized vol to judge real exuberance/complacency... but we note that there is a floor to the premium vol sellers are willing to accept to take on the rip-your-arms-and-legs-off probability. While implied vol provides insight into expectations of risk ahead, it is the premium to realized vol that tells you the real story and currently that premium remains very high - in other words, the market IS expecting considerably more volatility ahead (lower pane of first chart above)....MORE