Yesterday’s session was relatively calm, with no meaningful directional move in the underlying market. Volatility initially declined, briefly suggesting some normalization after the previous sessions. That move proved temporary. Volatility subsequently reversed higher and continued to rise into the close.
The most notable feature was that both tails of the volatility surface became more expensive at the same time. Risk premium increased in both the downside and upside wings, suggesting that the market was assigning a higher price to protection against a larger move in either direction rather than expressing a clear directional view.
Editor’s Note reflects the author’s market perspective at the time of publication and should be read as commentary, not investment advice.
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