When the VIX Index (VIX), also known as the CBOE Volatility Index, whizzed past the 20 level last week, traders started bracing for the possibility of the so-called fear index spiking back to 30, the level we hit during the October sell-off. Yahoo Contributor Jon Najarian, who is also co-founder, of OptionsMONSTER, is keeping his cool. “I don’t know if that’s in the cards here just yet,” he told Yahoo Finance.

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According to Najarian, a short-term pop in the VIX makes sense amid the downward spiral in crude. “There certainly is a feeling right now that it's going to be hard for the market to rally with the pull, the downward pull, in the energy space.” The sell-off in crude, now at $58 a barrel, is down nearly 40% from January. That sell-off has been hammering the United States Oil ETF (USO) and the Philadelphia Oil Service Sector ETF (OSX).

Related: Gold worth a trade, oil not so much: Barry Ritholtz

Those investors that are riding the S&P 500’s (^GSPC) record run, who don’t like the whiff of fear they got last week, may want to protect their gains. That’s what Najarian is doing. “We put together a spread [call spread], so I’d buy for instance the 20 [call] and sell the 25 [call] 1:1." 

The other important factor impacting the market is year-end portfolio changes. As more investors take some risk positions off the market, volatility can move higher. The good news, according to Najarian, is that it is a short-term event. “We basically have two weeks into the end of the year. We’ll see if the market doesn’t get back to partying. I think it might.”

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