Business & Finance
Stock investors ramp up hedging activity through options ahead of seasonal volatility
CNBC reports that options linked to the VIX index are seeing rising demand as traders prepare for seasonal risks.
The short version
- Market participants are acquiring more downside protection through Cboe's VIX index ahead of historically volatile autumn months.[CNBC]
- September and October regularly see sharp index spikes, and Nomura noted three-month call skew has reached the 91st percentile.[CNBC]
- Analysts expect elevated volatility across equities through year-end, though measures may subside after November midterm elections.[CNBC]
Key facts
- Investors are actively seeking protection against equity declines as hedging activity rises in Cboe's VIX index.[CNBC]
- September and October historically experience some of the largest jumps in the VIX following midyear lulls.[CNBC]
- Nomura's Charlie McElligott reported that the three-month call skew for the VIX has reached its 91st percentile.[CNBC]
- Zachary Griffiths noted that both the MOVE index and VIX sit near 10-year averages, while corporate credit spreads remain tight.[CNBC]
What remains uncertain
- Whether heightened market turbulence will persist through year-end or dissipate after November midterms remains uncertain.[CNBC]
Sources
Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.