1) lower demand for protection: a lot of traders don't want to own volatility because they don't want to pay for it (puts are expensive!), and many are sitting on the sidelines with heavy cash positions.
2) there hasn't been a huge imbalance between the demand for puts and calls recently. Even if there was low demand, a sudden imbalance in option demand — where, for example, 90 percent of the demand for options was for puts instead of calls — would drive up the VIX. But that hasn't happened either.
3) the mechanics of how the VIX is put together are acting to tamp down volatility. The VIX measures implied volatility going out 30 calendar days. Note I said 30 calendar days, not 30 trading days. But we are entering a holiday period where there are a lot of non-trading days in the next 30 days. Therefore, expected volatility is a bit lower than when there are more trading days.
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