Volatility Pros Say Record VIX Surge on Monday Was a Head Fake

On the surface it was a stock shock for the ages, a once-in-a-generation spike in turbulence that reverberated through global markets. But what if Monday’s extreme volatility event wasn’t quite what it seemed?

That’s the theory now bouncing around on Wall Street, after a frantic week in which the Cboe Volatility Index staged its biggest intraday jump on record.

The VIX, as it’s known, is sometimes called the fear gauge for its use as a measure of expected stress in US stocks. But some options pros are asking whether it flashed excessively bearish sentiment — less tethered to ...