News / US / cnbc
Investors ramp up VIX hedging as seasonal volatility risks loom
Finance · Investment Banks/Brokers · cnbc · 2026-09-10
CBOE, IBKR
Market participants are increasing protection against potential equity swings as seasonal trends and geopolitical tensions converge with interest-rate uncertainty.
What Happened
Seasonal Volatility Trends: The Cboe Volatility Index (VIX) is seeing increased activity as investors prepare for historically turbulent months in September and October. This seasonal pattern is being compounded by external factors, including U.S. political events and rising geopolitical tensions in the Middle East.
Hedging and Market Sentiment: Nomura's Charlie McElligott highlighted that VIX three-month call skew is currently in the 91st percentile, indicating that investors are paying a premium to hedge against future market instability. This shift follows a period where investors had previously rotated cash back into equity markets, creating a new demand for downside protection.
Macroeconomic Pressures: Experts point to a 'negative risk trinity' involving shifting interest-rate expectations, inflationary concerns, and Treasury supply dynamics. The elevated MOVE Index suggests that stress in the bond market is increasingly spilling over into the equity space, creating cross-asset pressure.
Outlook and Future Relief: While volatility is expected to remain elevated through the end of the year, strategists anticipate a potential easing in November. The resolution of political uncertainties following election cycles is expected to provide the clarity needed to reduce market swings and stabilize the policy backdrop.