The CBOE Volatility Index, also known as the VIX or "fear index," witnessed a sudden surge of 9% Friday, marking the most significant single-day increase since mid-August. Produced by CBOE Global Markets Inc. (NYSE:CBOE), the VIX is a well-regarded gauge of option volatility in the S&P 500 index.

This rapid surge in market volatility followed weeks of relative calm, with the VIX hitting its lowest level since January 2020, closing at 12.81 on Thursday.

What Triggered VIX's Friday Spike?

Several factors may have contributed to the remarkable daily spike in the VIX. Economic data published this week indicated a resurgence in inflation, raising some concerns among investors.

Additionally, the surge in oil prices may have played a significant role in driving up the VIX. WTI crude oil prices touched $90 per barrel on Friday, adding to the growing concerns about rising energy costs and their potential impact on the broader economy and interest rates.

Technical factors were also at play. Friday coincided with a triple witching day, a term used to describe the simultaneous expiration of stock options, stock index futures and stock index options contracts, all on the same trading day.

This event, which occurs four times a year, led to a total value of option expirations amounting to an astonishing $3.4 trillion.

The previous triple witching day in June saw the VIX rise by 4.4%, and in March, it surged by 11%.

Read also: 'Bonds In A Multi-Year Bear Market', Experts Sound Alarm On Further Rate Hikes As Oil Goes Haywire

CBOE Global Markets Reports Significant Growth in VIX Options

CBOE Global Markets released its second-quarter financial results on Aug. 4, 2023. The company reported earnings per share of $1.78, slightly exceeding estimates of $1.77. However, the revenue figure of $467 million fell short of expectations, which had been set at $469 million.

Of particular interest in CBOE's report was the substantial growth in average daily volumes for VIX options, which increased by an impressive 53% year-over-year in the second quarter. This growth underscores the heightened interest in and demand for options linked to market volatility.

Goldman Sachs analysts recently revealed the VIX is presently trading at bargain levels compared to what the broader economic context would imply.

No exchange-traded fund exactly replicates the CBOE Global Markets' VIX.

However, the ProShares Trust VIX Short-Term Futures ETF (NYSE:VIXY), the ProShares Trust VIX Mid-Term Futures ETF (NYSE:VIXM), and the ProShares Trust Ultra VIX Short-Term Futures ETF (NYSE:UVXY) may provide a good correlation to participate in the VIX's movements.

Now read: Stock Retreats As Bond Yields Climb Amid Oil Concerns, UAW Strike: What's Driving Markets Friday?

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