Tech bulls lose conviction as key trading metric blows out to the widest since 2008

When you're in the middle of a hurricane, the price for umbrellas is going to be expensive, no matter which way the wind is blowing. For stocks, the hurricane is the Nasdaq-100 index , and the direction of winds may be changing. The spread between Nasdaq 100 1-month implied volatility at 28 and the S&P 500 below 16 is near record highs. It's been widening all year as the stock market's returns concentrate around Big Tech winners, but the reason for this latest stretch of the gap is different from a few months ago , when Nasdaq options prices were being skewed by extreme demand for calls. Today, it's coming from demand for puts, which have gotten more expensive while premiums for far out-of-the-money calls tapers off. The spread between the implied vol of 25-delta puts in the Nasdaq 100 and S&P 500 – bearish contracts with a one-in-four chance of winning – rose from just 3 points in mid-March to 13.6 today, according to Bloomberg data compiled by Nasdaq. In 2020, the spread reached 13.3. Before that, the only time higher was in September 2008.