Cboe says downside hedging demand lifts VIX ahead of megacap earnings

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VIX rises before tech earnings

Highlights

Cboe reports the VIX Index rose 5 points week over week to 20, driven by downside hedging demand ahead of megacap earnings.
One-month S&P 500 30-delta skew jumps from the 15th percentile to the 82nd percentile, highlighting aggressive protective positioning by investors.
Cboe launches an additional 130-minute options trading session for 29 large-cap stocks and ETFs from 7:30 a.m. to 9:25 a.m. ET, expanding flexibility.

Volatility trends and new options session

According to Cboe Global Markets, implied volatility is mixed across major asset classes this week after hotter-than-expected September CPI and PPI readings revive fears of further Federal Reserve rate hikes and add to worries about debt-funded AI spending.

The exchange operator says the MOVE Index holds in a 99 to 102 range through last week, suggesting the rates market has largely priced in that scenario. The 10-year Treasury yield briefly rises to 5.33% after the CPI release, then reverses on safe-haven demand to end the week 15 basis points lower at 5.10%.

Credit volatility also moves higher, with VIXHY and VIXIG climbing from the 75th to the 86th percentile, as investors reprice borrowing risks tied to AI expansion for high-yield companies such as CoreWeave and for investment-grade borrowers including Oracle and large hyperscalers.

Cboe also says traders start getting an additional 130 minutes each day to trade options on 29 large-cap stocks and ETFs, including SPY, QQQ, IWM, NVDA, TSLA, AAPL, INTC, MU, META, AMZN, AMD, MSFT and GOOGL. The new session runs from 7:30 a.m. ET to 9:25 a.m., while non-ETF symbols also get an extra 15 minutes of trading at the end of the day.

Hedging demand builds before earnings

Demand for downside protection is the main force behind the latest jump in equity volatility, with the VIX Index rising 5 points week over week to 20, outpacing the move implied by skew by 3.5 points.

The demand for downside convexity steepens one-month S&P 500 30-delta skew from the 15th percentile to the 82nd percentile, indicating a sharper bid for protective positioning. Activity accelerates into the weekend, with Friday's SPX and XSP options volumes ranking as the fourth- and fifth-highest on record.

The moves point to a market that is preparing for larger swings as megacap earnings approach, while also weighing the impact of persistent inflation and rising financing concerns across the AI investment cycle.

In our earlier article on mounting financial and execution risks in the U.S. AI data center buildout, we highlighted how higher interest rates and inflation are making capital harder to secure while delays and cancellations raise doubts about how fast capacity can expand. We also noted that investor confidence has been shaken by setbacks such as CoreWeave’s sell-off and cost overruns at projects like Cipher’s Barber Lake, alongside growing power constraints and local opposition that could further slow development.

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