Goldman: As Panic Index Nears Record, Chase For Downside Protection Is Off The Charts

Earlier we noted that there had been a spike in hedging activity amid concerns traders were growing increasingly anxious that the year's rally may be over. Here's an example of exactly what this activity looked like. 

As Goldman derivatives guru Brian Garrett writes over the weekend, as the tape reversed sharply on Thursday following the initial post-Nvidia bounce, hedging demand was apparent. Goldman saw "a massive bid to puts" as volumes remained elevated: as shown below, total put volume was the third highest YTD and total option volume reached one of its highest levels of all time. The chase for downside protection has led to one of the highest normalized put/call skew levels in the last three years.