They might. But not endogenously, yet. Charlie McElligot at Nomura.
Yet another “Spot Up, Vol Up” day in US Equities, which continues to show that traders remain far-more concerned about missing the “right-tail / crash-UP”tha nany sort of downside risk event(Vol of Vol / VVIX at lows last seen pre March ’23 Banking Crisis), with SPX 3m 25d P / 25d C Skew cratering back to just 9%ile 1 year look-back rank in recent days as the market melts-higher (the “Calls over Puts” Skew flattening was particularly evident yesterday in high-beta small cap RTY / IWM, which is the YTD laggard amongst major US indices).
And in this world of still robust but certainly not “totally beaucoup” –Net Exposure / Long positioning(over a 5- and 10- year LT trailing horizon) which is evidenced by the aforementioned “still chasing into Upside Tail” hedges via Options -theme, that makes it highly unlikely to see a “crash-DOWN” at this immediate juncture.
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