“Volmageddon” (volatility + Armageddon) is a portmanteau financial term that was popularized in February 2018. “First Volmageddon Casualties Emerge: One Hedge Fund Down As Much As 65%” was published on the Zero Hedge financial blog on February 6, 2018, and “Volmageddon Sparks 6000-Pt Swings In The Dow As Liquidity Evaporates” was published on Zero Hedge two hours later. “Analyst Who Predicted Volmageddon: Don’t Even Think About Buying The Dip” was published on Zero Hedge on February 7, 2018.
 
“Volmageddon” (Tennessee Volunteers + Armageddon) describes the sports teams at the University of Tennessee and has a different meaning.
 
       
Wikipedia: VIX
The CBOE Volatility Index, known by its ticker symbol VIX, is a popular measure of the stock market’s expectation of volatility implied by S&P 500 index options, calculated and published by the Chicago Board Options Exchange (CBOE). It is colloquially referred to as the fear index or the fear gauge.
 
The formulation of a volatility index, and financial instruments based on such an index, were developed by Menachem Brenner and Dan Galai in 1986. They stated the “volatility index, to be named Sigma Index, would be updated frequently and used as the underlying asset for futures and options. ... A volatility index would play the same role as the market index play for options and futures on the index.”
 
Wikipedia: Armageddon
Armageddon (from Ancient Greek: Ἁρμαγεδών Harmagedōn, Late Latin: Armagedōn) will be, according to the Book of Revelation, the site of gathering of armies for a battle during the end times, variously interpreted as either a literal or symbolic location. The term is also used in a generic sense to refer to any end of the world scenario.
 
Zero Hedge
First Volmageddon Casualties Emerge: One Hedge Fund Down As Much As 65%
by Tyler Durden
Tue, 02/06/2018 - 15:36
Yesterday’s historic VIX move already destroyed an entire asset class: the inverse VIX ETN are no more, meaning retail no longer has a handy, convenient way to short vol, which incidentally is for the better. Unfortunately, what it means is that retail will now simply short VIX ETNs like VXX, exposing themselves to unlimited downside risk but that’s what natural selection is all about.
 
Zero Hedge
Volmageddon Sparks 6000-Pt Swings In The Dow As Liquidity Evaporates
by Tyler Durden
Tue, 02/06/2018 - 17:40
Full Court Press from the media today to ensure bag-holders stay in…
 
So, first things first, the total catastrophe that is the Inverse VIX ETF XIV dropped 90% in after-hours trading, triggering its termination event…
     
Twitter
BDub‏
@Lord_ofthe_Pies
Replying to @zerohedge
Srsly? “Volmageddon”?  Was Indexalypse taken?  Ugh! #WhyDOWeKeepDoingThisItsStupid
12:14 PM - 6 Feb 2018
 
Zero Hedge
Analyst Who Predicted Volmageddon: Don’t Even Think About Buying The Dip
by Tyler Durden
Wed, 02/07/2018 - 14:51
Even though the threat of pervasive selling of volatility was generally ignored by the financial community and broader public, at least until Monday’s historic VIX surge when a cascading short squeeze amid the inverse VIX ETN community unleashed the biggest VIX buying order in history also called “volmageddon”, there were many who warned about the potential threat that the one-way VIX short pile up has created: among them were Barclays, Goldman, Morgan Stanley, Fasanara Capital, Peter Tchir, Kevin Muir… as well as SocGen’s Roland Kalyoan.
 
Last November, Kaloyan warned about the risks of overcrowded short positions on volatility. In his Nov. 23 note, the SocGen strategist wrote that he was “less enthusiastic” about equities in 2018 and warned that the number of short positions on volatility could “potentially strongly deteriorate the risk reward profile of equity markets” to wit:
 
We are less enthusiastic about equities heading into 2018 – We do not see much upside on our major equity targets for the next 12 months. We expect stretched valuations and rising bond yields to limit equity index performances in 2018 and the prospect of a US economic slowdown in 2020 to further cramp returns in 2019. We also raise some concerns about the quantity of shorts on volatility, which could potentially strongly deteriorate the risk reward profile of equity markets.