Equity markets continue to hover near record highs, but the options markets are sending a different message.
Derivatives trades are increasingly positioning for a sector-specific shock, centered around technology.
The key warning signal comes from a relationship between the Nasdaq 100 – the most popular tech index- and the broad market.
The volatility ratio between these indexes indicates that investors are far more concerned about the future of growth stocks than headline equity prices would suggest.
The Highest Since 2007 The VXN/VIX ratio, which compares implied volatility between the Nasdaq-100 and the broader S&P 500, has surged to 1.61.
