According to BlockBeats news, on August 15, Adam, a macro researcher at Greeks.live, posted on social media that as PPI and CPI were implemented one after another, the market’s volatility expectations dropped significantly, which in turn drove a significant decline in the IV of each major term. The short-term IV fell by over 20% this week, while the mid- to long-term also saw a decline of about 5%.
This kind of decline in implied volatility IV is relatively rare in the options market. Sellers, mainly institutions, can make up a lot of profits in this round of decline to make up for the hedging losses caused by the huge fluctuations in the past month.
Now that the term structure has returned to a solid structure of far highs and near lows, the market may be stagnant for a while, and the cost-effectiveness of selling medium-term options now looks better.
