Cboe Reports Shift to Hedging in Options Market
Mandy Xu of Cboe reports a shift toward hedging and increased volatility bets as investors prepare for mega-cap tech earnings.
Market sentiment in the options market has shifted from a bullish stance to increased hedging demand over the past week, according to Mandy Xu of Cboe. This trend is most prominent at the index level and among mega-cap tech stocks as investors anticipate earnings reports from hyperscalers.
Xu notes a significant spike in VIX upside call buying, indicating that some investors expect a potential macro volatility shock. Despite this, she describes the current environment as a "stock pickers market" where investors remain focused on fundamental risks, specifically the monetization of artificial intelligence.
Cboe Global Markets recently expanded its services by launching early hour options trading starting at 07:30. This initiative has seen uptake from U.S. retail investors and international clients in the APAC region. In the energy sector, Xu observes that volatility has moderated despite oil prices remaining above $100, as the market sees a lower likelihood of short-term escalation.
