Asset managers have aggressively increased their VIX futures shorts to the highest level since July 2024.

In other words, funds are betting heavily on continued low stock market volatility.

Such extreme short VIX positioning often leaves markets vulnerable to sharp volatility spikes if sentiment turns.

A similar setup occurred in July-August 2024, when a sudden shift in risk appetite drove a nearly -10% market drop.

Are we heading for a pullback?