Traders Placed Bets Against VIX and Swiss Franc Ahead of Tariffs: COT Report

View related analysis:

* Please note that this data is only accurate up to the daily close of 25^th March 2025. Given the market in the second half of last week, market positioning is likely to have varied considerably for some markets from what has been reported.

If there is anything to be gleaned from the recent COT data, it is how unprepared traders were for Trump’s tariffs. Not only did they increase bets of a lower volatility by shorting the VIX, but also shorted the Swiss franc – which turned out to be the best performing FX major last week. It is also interesting to note that asset managers decreased short bets against Nasda1 00 futures, which is unfortunate given it declined 15% last week (most of which was in the second half of the week).

Market positioning from the COT report – 25 March 2025:

Large speculators increased their gross-short exposure to gold futures by -34% (-22.7k contracts)
They also increased short by against silver futures by 14.5% (3.6k contracts)
Gross-short exposure to WTI crude oil futures rose by 11% (15.8k contracts)
Asset managers increased their gross-short exposure to VIX futures by 43.1% (16.8k contracts)
They also increased gross-short exposure to S&P 500 futures by 2.1% (4.2k contracts) and trimmed longs by -2.3% (-25.7k contracts), which dragged net-long exposure by -30k contracts
Asset managed reduced gross-short exposure to Nasdaq 100 futures by -9.6% (-4.8k contracts)
Large speculators increased gross-short exposure to Swiss franc futures by 12.3% (5.1k contracts)

VIX futures (VX) positioning – COT report:

Gross-shorts against the VIX rose at their fastest weekly pace in 10 months among asset managers, on the eve of Trump’s tariffs being fully unveiled. This means that traders were siding with lower volatility, and not the higher levels of volatility that were delivered.

The VIX went on the close the week at its highest level since October 2020, and has continued higher today in Asia to a near 5-year high. It was also the most bullish week for the VIX in five years by Friday’s close, which has surely burned a fear bearish fingers. I suspect we’ll see that asset managers increased long bets and reduced shorts quite considerably in the next COT report.

CHF/USD (Swiss franc futures) positioning – COT report:

If there were any concerns of tariffs last week, it cannot be seen on positioning of Swiss franc futures. Despite the Swiss franc going on to be the strongest FX major, large speculators and asset managers increased their net-short exposure against the safe-haven currency by around 10k contracts between them. Long bets were effectively flat, and gross-short were increased by 5.2k and 4.8k contracts respectively.

That the Swiss franc rose at its second fastest pace in seven months strongly suggest these bearish bets capitulated, and we likely will see a notable pickup of long bets in the next report.

Nasdaq 100 futures (NQ) positioning – COT report:

Bears who closed their bearish bets against the Nasdaq last week may be kicking themselves, given the market fell around -15% by Friday’s close. Asset managers reduced gross shorts by -4.8k contracts, which is their fastest pace of short covering since November. It was also the second week that net-short exposure fell.

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.