Something strange happened to Wall Street’s so-called fear index on Wednesday.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, broke below 10 for less than a minute Wednesday at 2 p.m. ET, right after the Federal Reserve decided to keep interest rates unchanged.
While some experts questioned the significance of the move given its brevity, it did mark the first time since Feb. 16, 2007 that the index fell below 10. Experts who spoke to CNBC said the move could have come as a result of algorithmic glitch or some other anomaly, but it’s very difficult to pinpoint the exact cause.
The Chicago Board Options Exchange, which calculates the Vix, did not immediately respond to CNBC’s request for comment.
The Vix’s sudden move “would imply that at the moment the news broke, bids in the strip or option chain were temporarily pulled due to a large order imbalance,” said Dan Deming, managing director at KKM Financial.
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