No One Knows Why The Volatility Index Is So Low

The Volatility Index, also known as the "fear index," briefly traded below the 10 mark on Wednesday for less than one minute immediately following the Federal Reserve's announcement that interest rates will be maintained at current levels.

Regardless of the very brief time it traded below 10, it represents a level not seen since February 16, 2007.

Why is this the case? The answer is simple: No one quite knows, at least according to a CNBC report.

Fear Index Uncertainty

CNBC reached out to various experts who were only able to come up with hypothesis. Dan Deming, the managing director of KKM Financial suggested the dip below the 10 mark was an anomaly.

He explained that the move implies that sudden move below 10 "would imply that at the moment the news broke, bids in the strip or option chain were temporarily pulled due to a large order imbalance."

He continued, "While the Vix cash had that move, Vix futures didn't really react. That would lead me to believe this was some sort of anomaly."

Randy Frederick, vice president of trading and derivatives at Charles Schwab suggested that the move was likely driven by a "very large order" by a high-frequency trader. He added that this shouldn't be viewed as a big deal since the index recovered quickly.

The index was trading near 12 at last check Thursday.