VXN/VIX Ratio Hits 1.64, Approaching 20-Year Peak as Tech Stock Hedging Intensifies

According to Torsten Slok, chief economist at Apollo Global Management, the VXN-to-VIX ratio surged to 1.64 as of June 16, marking its highest level since 2017. The nasdaq-100 volatility index (VXN) has increasingly diverged from the broader market's VIX, signaling that hedging demand is concentrating on technology stocks amid AI-driven market rallies.

MarketWatch reported that while the VIX remains below its historical average at under 20, the VXN continues climbing, indicating investors are paying higher costs to protect against potential tech sector volatility. This divergence reflects what market observers call a "dispersion trade," with fund flows rotating from mega-cap tech stocks to semiconductor equipment, servers, and data center plays. On Tuesday, the iShares Semiconductor ETF plunged over 7 percent, while the S&P 500 fell roughly 1 percent, underscoring concentrated selling pressure in AI and chip-related assets.