With the volatility from April gradually subsiding, traders are now focusing on longer-term strategies to hedge against potential market shocks. Despite calmer markets currently, the risk of sudden headline-driven disruptions remains significant. A consensus among derivatives strategists anticipated that while regular option selling by income ETFs and similar funds would generally keep volatility in check, there would still be occasional short-term shocks. Following the April 2 tariff-related selloff, which caused the Cboe Volatility Index to spike before reversing, this outlook appears accurate thus far.
— new from Bloomberg
