Volatility & Market Recap: July 28 – August 1, 2025

Looking Back: Calm Turns to Caution

• VIX Movement: The VIX started the week calm at 15.03 (July 28), hovered in the 15–16 range, then surged to 20.38 by the close on August 1. This sharp jump marked a sudden return of market anxiety after weeks of low volatility. (Yahoo Finance VIX Data)
• Volatility ETFs: UVXY and VXX, which had been decaying for weeks, spiked sharply on August 1 as traders rushed to hedge. Heavy volume and large intraday gains reflected the abrupt shift from complacency to caution. (UVXY Data)
• Macro & Policy: President Trump’s executive order raised “reciprocal” tariffs on a wide range of countries (15–20%). Combined with a weaker-than-expected July jobs report, this rattled markets and triggered the volatility spike. GDP growth was revised lower, and inflation data showed tariffs starting to impact import prices. (Schwab Market Update)
• Earnings & Sector Moves: Apple, Amazon, Meta, and Microsoft all reported. Apple and Meta beat expectations, but Amazon’s guidance disappointed, sending shares lower. Figma’s IPO soared 250% on debut, fueling talk of market froth. (CNBC After-Hours Movers)
• Other Sectors: First Solar and Reddit posted strong results, while Stryker and Coinbase disappointed. Big Oil (Exxon, Chevron) and consumer staples (Colgate, Kimberly-Clark) were in focus for Friday’s session.

Sequential Analysis & Takeaways

• Calm Turns to Caution: The market’s surface calm was shattered on August 1 by the weak jobs report and tariff escalation. The VIX’s surge to 20.38 reflected a sudden repricing of risk and a rush to hedge.
• Volatility Products React: UVXY and VXX, which had been in decline, spiked sharply as traders scrambled for protection. This is a classic example of how quickly volatility can return when macro and policy shocks hit.
• What’s Next: With volatility back above 20, traders should expect choppier markets and higher option premiums. The next few weeks could see further swings if tariffs escalate, economic data disappoints, or the IPO/tech rally falters.

Takeaway for Traders

• The VIX spike to 20.38 on August 1 is a wake-up call: volatility can return suddenly when macro and policy risks collide.
• Hedging demand surged as traders moved from complacency to caution.
• With tariffs and economic uncertainty unresolved, expect more two-way volatility and higher option premiums in the weeks ahead.
• This is a classic environment to consider low-cost hedges (VIX calls, UVXY/VXX) as insurance, but not to chase volatility unless a true catalyst emerges.

Key Sources

• Yahoo Finance VIX Data
• CNBC After-Hours Movers
• Schwab Market Update
• UVXY Data
• Jobs/Earnings Calendar

• Author
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Tony

I have been trading options since 2010 and have been testing and experimenting with various trading styles. Fundamental Analysis based, Technical Analysis based, Trend Following, Day Trading, Swing Trading, etc.

My primary option trading strategies incorporate volatility and I am constantly experimenting with various trading strategies to improve my PNL.

I hold two Master’s degrees (MSc and MBA) with career experience as a cancer research scientist and a digital marketer.

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