Options traders are bracing for a potential stock-market crash, according to data from Cboe Global Markets. The demand for “crash protection” soared last week, with deep out-of-the-money call options tied to the Cboe Volatility Index experiencing high volumes.
This trend is a warning sign for investors and market analysts. The Cboe Volatility Index (VIX) is a widely followed measure of stock-market volatility, often referred to as the “fear index.” When VIX levels rise, it indicates that traders are increasingly concerned about a potential market downturn.
The surge in demand for crash protection suggests that investors are preparing for a possible correction or crash. This could be due to various factors, including economic concerns, geopolitical tensions, or interest rate changes.
Source: https://www.marketwatch.com/story/options-traders-are-bracing-for-a-stock-market-crash-63535aeb