There's a record disconnect unfolding in the trading pits right now
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- VIX fell to 15.6 on Thursday, the lowest level since January, down from about 35 in March when geopolitical fears spiked volatility.
- VIXEQ (Cboe’s S&P 500 Constituent Volatility Index) sits near a one‑year high, creating the widest spread with VIX since January 2023.
- SMH (VanEck Semiconductor ETF) implied volatility is about 50%, more than three times the S&P 500 level; Micron’s implied volatility reaches 101%.
- Citadel Securities reports that gross options premium in semiconductor stocks is 25% above the March 2024 record and five times the historical monthly average.
- Small traders have been buying costly single‑stock options hoping for extended rallies, which has mostly worked, and SPY put‑selling was the most popular trade Thursday.
Why it matters: Options traders profit from soaring semiconductor premiums, while index‑focused investors see lower risk; the 25% premium surge could drive tighter spreads and higher hedging costs for chip makers.
