Fear Is Gone. The Risks Aren’t

Fear is gone. The risks aren’t

Volatility has collapsed even as the macro backdrop remains anything but calm. The VIX is back at a 14 handle, Goldman’s Vol Panic Index just recorded its biggest one-day decline in a decade, and convexity across indices, small caps and China is trading near historic lows.

The fear reset has been extreme. With momentum still violent and rates vol refusing to disappear, this looks like the moment to buy convexity, not sell it.