Today's VIX/VIX3M Reading
The latest VIX/VIX3M ratio is 0.7959 as of the August 7, 2026 close. The VIX term structure is in contango, day 85 of the normal regime. VIX closed at 14.90 and VIX3M at 18.72. The ratio is down from 0.8106 the prior session. Both canary signals are risk-on.
What Is the VIX/VIX3M Ratio?
The VIX/VIX3M ratio measures the slope of the Cboe volatility term structure:
Ratio = VIX close ÷ VIX3M close
VIX measures expected S&P 500 volatility over the next 30 days, while VIX3M measures expected volatility over the next 93 days. VIX3M was known as VXV until 2017, so older research may use the VXV ticker. Both are Cboe volatility indexes calculated and published each trading day.
What the Ratio Shows
The ratio summarizes the volatility term structure in a single number:
- <1.00 = contango
- 1.00 = flat
- >1.00 = backwardation
Contango is the normal regime, with VIX below VIX3M, occurring on roughly 92% of trading days since 2010. Backwardation occurs when VIX rises above VIX3M, indicating that the market is pricing higher near-term volatility than volatility further out. It is commonly associated with periods of elevated short-term market stress.
Backwardation begins strictly above 1.00 at the daily close. A ratio of exactly 1.00 is flat and remains in the normal regime.
Why Use the Ratio Instead of VIX Alone?
The ratio measures the shape of the volatility term structure, not just the absolute level of volatility. A high VIX does not necessarily mean the term structure is inverted, while the VIX/VIX3M ratio can identify backwardation regardless of the absolute VIX level. This makes the ratio a useful market stress signal alongside the VIX itself.
VIX/VIX3M is the medium-term pair in the Cboe volatility term-structure family. Faster and slower pairs include VIX9D/VIX and VIX/VIX6M.
Why VIX/VIX3M Works as a Canary Signal
The VIX term structure contains information about equity market conditions that the spot VIX level alone does not capture. When VIX rises above VIX3M, traders are paying more for near-term volatility protection than for protection further out. This inversion is a pricing signature of acute, immediate stress.
The slope of the VIX term structure has also shown documented return predictability. Johnson (2017), in the Journal of Financial and Quantitative Analysis, found that the VIX term structure contained information about subsequent equity risk premia.
Backwardation Has Flagged Major Volatility Shocks
Historical data shows that nearly every major volatility shock in the dataset since 2010 registered a period of backwardation, including:
- COVID-19 (2020): ratio peaked at 1.34 and remained inverted for 43 days
- Volmageddon (2018): peak of 1.33
- U.S. credit downgrade (2011): peak of 1.26
- Yen carry unwind (2024): peak of 1.14
- Brexit (2016)
- April 2025: peak of 1.27 and 16 days of backwardation
However, most backwardation episodes do not develop into major volatility shocks. 77 of 103 historical episodes (75%) never exceeded 1.05 and ended within days. This is why the signal uses additional confirmation layers, including the 5-day median, depth zones, and duration.
Why It Is a Canary, Not a Sell Signal
Backwardation should not be interpreted as a prediction that stocks will fall. Academic research has found that an inverted VIX curve has been positively related to subsequent S&P 500 returns, while contango has shown no significant predictive power. Backwardation has therefore often marked periods of capitulation rather than the beginning of a prolonged decline.
The median backwardation episode since 2010 lasts only 2 days and typically resolves quickly. A raw inversion is therefore better viewed as a tripwire for rapidly escalating stress than as a directional trading signal. When an inversion begins, there is no way to know whether it will remain brief or develop into a major event. The 5-day median, depth, and duration layers help distinguish persistent stress from short-lived noise.
Evidence From Defensive Allocation Backtests
The ratio has also been tested as a defensive allocation gate. In a 2007–2024 backtest replicating Donninger's IVTS approach, Valuelytica reported that adding a 5-day median filter increased the SPY strategy's CAGR from 9.17% to 11.75% and Sharpe ratio from 0.61 to 0.78, while volatility remained broadly unchanged.
The results also support using the structural 1.00 inversion threshold rather than fitting an optimized threshold to historical data. A well-known 0.917 threshold strategy stopped working around mid-2013, illustrating how optimized thresholds can decay over time.
Why the Ratio Is a Fast Canary
VIX/VIX3M reacts to changes in the volatility curve within a single trading session. Slower signals such as moving-average and trend-following gates typically require weeks to respond.
The ratio therefore serves a different purpose: it is the fast canary, while slower signals provide confirmation. This distinction was visible in December 2018, when the VIX futures curve had returned to contango while the cash VIX term structure continued to signal stress.
Historical VIX/VIX3M Backwardation Episodes
There have been 103 backwardation episodes since 2010, with the VIX/VIX3M ratio above 1.00 on approximately 7.7% of trading days. The median episode lasted 2 days, while the longest lasted 43 days during the COVID-19 crash in 2020. The table below highlights the deepest readings in the historical dataset.
VIX3M history begins in September 2009, so the 2008 financial crisis predates this dataset. During the Global Financial Crisis, VIX backwardation persisted for more than four months, substantially longer than any episode recorded since.
Top 10 Deepest VIX/VIX3M Backwardation Readings
| # | Event | When | Peak IVTS | Peak VIX | Duration |
|---|---|---|---|---|---|
| 1 | COVID-19 crash | Feb–Apr 2020 | 1.34 | 82.7 | 43 days |
| 2 | Volmageddon | Feb 2018 | 1.33 | 37.3 | 8 days |
| 3 | China devaluation | Aug–Sep 2015 | 1.31 | 40.7 | 9 days |
| 4 | April 2025 selloff | Apr 2025 | 1.27 | 52.3 | 16 days |
| 5 | U.S. credit downgrade | Jul–Aug 2011 | 1.26 | 48.0 | 25 days |
| 6 | Q4 2018 selloff | Dec 2018–Jan 2019 | 1.25 | 36.1 | 12 days |
| 7 | Flash Crash | May 2010 | 1.24 | 41.0 | 2 days |
| 8 | October 2018 correction | Oct 2018 | 1.16 | 25.0 | 4 days |
| 9 | Yen carry unwind | Aug 2024 | 1.14 | 38.6 | 4 days |
| 10 | Dec 2024 Fed reaction | Dec 2024 | 1.14 | 27.6 | 1 day |
Depth vs. Outcome
The deepest historical episodes coincided with significant SPY declines, while episodes in the 1.10–1.15 range, including August 2024, resolved within days to weeks. This is the basis for the depth zones used in the signal classification.
How Quickly Episodes Resolved
Resolution speed varied considerably across periods. The 2011 episode cluster took months to fade, while the major episodes in 2018, 2020, and 2024 returned to normal conditions within weeks.
What the Ratio Does Not Capture
The 2022 bear market, when SPY declined approximately 25%, produced only brief and relatively shallow backwardation episodes. A prolonged, grinding decline does not necessarily invert the VIX term structure. The ratio therefore captures volatility shocks rather than every type of market drawdown.
For the deepest readings in this dataset, see Top 10 deepest backwardation readings below.
Frequently Asked Questions
Is the VIX term structure in backwardation today?
No. As of the August 7, 2026 close, the VIX/VIX3M ratio is 0.7959, in contango, day 85 of the normal regime. The live dashboard above updates after each trading day.
What does a VIX/VIX3M ratio above 1.0 mean?
A ratio above 1.00 means 30-day implied volatility (VIX) is higher than 93-day implied volatility (VIX3M). The market is pricing more risk in the immediate future than further out, which inverts the normal term structure. This state is called backwardation and has occurred on roughly 7.7% of trading days since 2010. A ratio of exactly 1.00 is flat and still counts as the normal regime.
Is VIX backwardation bullish or bearish for stocks?
Historically, more often bullish than bearish. Academic research has found that an inverted VIX term structure has been positively related to subsequent S&P 500 returns, because backwardation typically appears during capitulation, when much of the selling has already happened. However, nearly every major volatility shock since 2010 also passed through backwardation, and at the start of an episode there is no way to know which kind it will be. That is why this page treats the signal as a canary with confirmation layers rather than a directional bet.
Should you buy when backwardation starts — or when it ends?
The historical pattern favors the end. Most episodes since 2010 lasted only days, and buying the first inversion means buying while stress is still building. Studies of episode resolution have found returns after the ratio crosses back below 1.00 to be stronger and more consistent than returns during the inversion itself. The re-cross below 1.00, especially confirmed by the 5-day median, has historically marked the point where near-term panic was fading.
How long do backwardation episodes usually last?
Since 2010 the median episode has lasted 2 trading days. 75% of episodes (77 of 103) never pushed the ratio past 1.05 and faded within days; episodes that reached the 1.05–1.10 range ran a median of about 5 days, and episodes above 1.10 a median of about 7 days. The longest was 43 consecutive trading days during the COVID-19 crash in 2020.
What VIX/VIX3M ratio level signals a real crisis?
Depth has separated noise from crisis historically. Three quarters of all episodes never exceeded 1.05. Readings between 1.05 and 1.10 marked serious stress. Nearly every major crash pushed the ratio above 1.10: COVID-19 peaked at 1.34, Volmageddon at 1.33, and the 2011 U.S. downgrade at 1.26. The canary UI uses normal (≤1.00), stress (>1.00–1.10), and crisis (>1.10); the 1.05 band is an editorial depth cutoff within stress, not a separate UI zone.
What's the difference between the raw signal and the 5-day median?
The raw signal flips on any single close above 1.00 — fastest possible warning, but prone to one-day whipsaws. The 5-day median flips only when at least 3 of the last 5 closes are above 1.00, which means it can confirm no earlier than day 3 of an episode. The filter reduced flips by 66% since 2010 (103 raw episodes vs 35 filtered) without missing any deep episode, and an independent 2007–2024 backtest found it improved risk-adjusted returns.
Is this the same as VIX futures backwardation?
No. This page tracks the cash index term structure: VIX and VIX3M, both calculated from S&P 500 options. VIX futures backwardation refers to the futures curve (VX contracts), which drives products like VXX and UVXY. The two usually invert around the same events but can diverge — in December 2018, the futures curve had returned to contango while the cash term structure still signaled stress. Index backwardation does not imply the entire futures curve is inverted.
Why do some sources show the ratio as VIX3M/VIX?
Some research and tools quote the inverse ratio, VIX3M divided by VIX, where values above 1.0 mean contango and a drop below 1.0 means backwardation. The information is identical; only the direction flips. This page uses VIX/VIX3M, where above 1.00 = backwardation, which matches the most common convention in term-structure trackers.
What is VIX3M and where does its data come from?
VIX3M is the Cboe 3-Month Volatility Index, measuring expected S&P 500 volatility over a 93-day horizon. It was known as VXV until 2017. Like VIX, it is calculated and published by Cboe every trading day; this page uses official Cboe daily closes. VIX3M history begins in September 2009, which is why the episode dataset starts in 2010.