Index skew is back to pre GME crisis levels, having given back all that “sudden” stress. As we wrote during the de grossing days, “do not buy protection when you must, buy it when you can”.
What about single stock skew?
The upside call mania has continued strong, and single stock skew continues to price single stock calls very expensive relative to puts.
Yes, the world is chasing the inflation/reflation rainbow, but for the ones managing risk dynamically, overwriting single stock calls makes sense given how expensive calls are over puts.
Another strategy is hedging downside with relatively cheap single stock puts.
Second chart shows single stock call bonanza remains huge.