2018-02-06 22:28:39 UTC
Something is clearly out of whack because the volatility index is surging like this is a crash...but it's not
The VIX points change Monday was 2.5 times the average for an S&P 500 drop of that size.
The latest spike in volatility could point to a big problem on Wall Street, some traders believe. Trading algorithms and levered fund products may have separated this market from past historical patterns, causing moves to be exaggerated.
Carl Icahn told CNBC on Tuesday that these products will do greater damage to the market if left to grow unchecked.
"These are just the beginnings of a rumbling" and one day the market will "implode" because of these derivatives, the investor said.
Treasury Secretary Steven Mnuchin said Tuesday that algorithmic trading "definitely had an impact" on the market's moves on Monday.