CBOE Volatility Index (.VIX) is down 2.24 to 19.08, but thanks to the big gap Tuesday morning, is up 2.51 points on the week. 175000 calls and 117000 puts traded on the volatility index By way of comparison, 425000 calls and 285000 puts traded in the VIX pit Wednesday when it rallied to 23.22. VIX is now nearly 18 percent Wednesday’s peak levels. Still, at 19.08, the index seems to be price in a fare amount of macro-economic risk. The 60-day statistical volatility of the S&P is just 10.6 percent. The fourth quarter earnings have now largely been discounted and the S&P 500 trades at 13.5X forward earnings. Interest rates remain low and economic data is taking a backseat to events overseas. The main concern appears to be earnings risk from global macroeconomic uncertainties — China, Europe Debt Crisis and now spiking crude oil prices — and this might explain why VIX is 80 percent higher than SPX 60-day actual volatility.