Options traders are preparing for a potential stock-market crash, according to recent data from Cboe Global Markets. On March 3, 2025, Mandy Xu reported that demand for deep out-of-the-money call options linked to the Cboe Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” saw a significant increase last week.
- Stock-market crash concerns among traders
- Cboe Global Markets reports increased demand
- Surge in out-of-the-money call options
- VIX serves as Wall Street's fear gauge
- Data shared with MarketWatch by Mandy Xu
The recent surge in demand for deep out-of-the-money call options suggests that traders are bracing for increased volatility in the stock market. The Cboe Volatility Index (VIX) is a key measure of market expectations for future volatility, making it a critical indicator for options traders. The spike in options trading activity reflects a growing sentiment of uncertainty in the market.
Last week, the demand for these specific options increased significantly, indicating that traders are seeking protection against potential market downturns. Key statistics include:
- Surge in demand for call options linked to the VIX.
- Increased trading volume among options traders.
- Heightened concerns regarding market stability.
This trend could be attributed to various factors, including economic indicators, geopolitical tensions, and investor sentiment. As traders react to these signals, the VIX serves as a barometer for market fear, often rising in anticipation of market declines. The current market conditions suggest that traders are preparing for possible turbulence ahead.
In summary, the increase in demand for deep out-of-the-money call options tied to the VIX highlights traders’ concerns about a potential stock-market crash. The data from Cboe Global Markets indicates a heightened state of alert among options traders as they navigate uncertain market conditions.
