Traders work on the floor of the New York Stock Exchange. Photo: Reuters, Brendan McDermid

The CBOE Volatility Index (VIX), or “fear index”, has reached its lowest point since 2007. And it is doing so despite a higher than usual level of geopolitical uncertainty around the world.

Some analysts argue that the growing popularity of VIX exchange-traded products have created a flood of liquidity on futures markets that is distorting the VIX as a gauge for volatility, reports Bloomberg.

It seems most, however, still feel that stronger forces, including healthy economic indicators and accommodative Federal Reserve and European Central Bank policies, are keeping the index down.

“There is an overwhelming market narrative that equates to ‘don’t worry, be happy’,” Bloomberg quoted Nick Colas, chief market strategist at ETF.com as saying.

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