With all eyes on the market's traditional risk measure - VIX, tracking the forward-looking view of S&P 500 volatility - and the ever-higher prices of Tech stocks, a funny thing happened under the surface that is starting to worry some...
As S&P 'VIX' enedlessly limps lower, implied equity volatility for Tech stocks has been rising for two months...
As Bloomberg notes, The Chicago Board Options Exchange VXN - the technology cousin of the VIX which dipped below 10 in March - appears to remain in an uptrend even though the Nasdaq 100 closed at a record on Monday. In fact, it is at its highest levels relative to the S&P's VIX since 2007 highs in equities.
It seems as investors panic-buy their FANG stocks day after day, they are piling into hedge like never before. While investors don’t feel a pressing urge to hedge against a near-term swoon in the overall (S&P) market, they are still anxious about the tech sector following June’s dive.
So what happens next?