Hedge funds have amassed the largest short position in VIX futures since 2022, with net shorts reaching approximately 92,786 contracts for the week ending August 19, 2025. This surge in short positioning has more than doubled over the past five weeks, reversing an earlier net long stance from April, according to Commodity Futures Trading Commission (CFTC) data. The Cboe Volatility Index (VIX), a key measure of market volatility, has fallen below 15, indicating a period of low volatility. Market participants are betting that this calm will persist, even as the S&P 500 (SPX) hovers near all-time highs around 6,481 points. However, historical patterns suggest that such extreme short positions in volatility futures often precede sharp spikes and market turmoil, reminiscent of events like the 2018 Volmageddon. Despite the current low VIX level, some analysts caution that rolling futures positions could pose risks to hedge funds maintaining these shorts. Additionally, futures traders have shown increased bearish sentiment since July, with mounting sell pressure observed in major futures exchanges. As the market approaches September's Federal Reserve meeting and triple witching options expiration, volatility futures have edged lower, influenced by typical seasonal factors such as long holiday weekends and option decay. The prevailing market environment reflects a cautious optimism or possible complacency among speculators betting on continued market stability.