As per usual, people tend to buy volatility and protection in panic, instead of buying it when they can.
Virus mutation in Christmas thin trading is magnifying all moves, but what moves are you pricing when you start buying protection in panic.
Chart shows the vol structure of Eurostoxx 50, massive shift higher, especially the short end of the curve.
On Friday people priced approx 1% daily moves for the 1 month maturity. Today they are pricing it at 1.5% daily moves for the coming month.
Sure, this moves today, but consider how much it is going to move the coming month before grabbing protection with both hands.