Tech Vs. Small Caps Volatility Widens As Rotation Accelerates

2026-02-10 04:15:00 ET

By Mandy Xu

Cross-Asset Volatility: Implied volatilities diverged across asset classes last week as crypto, Tech, and silver continued to sell off while gold and small-cap stocks rebounded. Gold 1M implied volatility fell by almost 10 pts wk/wk to 32%, even as realized volatility increased, with the 1M implied-realized spread widening to a record -25%. The vol dynamic is even more extreme in silver: [[SLV]] 1M implied volatility now trades at a record 64 pt discount to realized vol (1M implied vol at 92% vs. realized vol at 156%). Sentiment has also shifted notably in the precious metals. [[GLD]] skew, which has been persistently inverted over the past year on the back of bullish call activity, has now flipped to puts trading at a premium as traders price in higher downside risk to the outlook for gold. GLD 1M skew (25-delta ratio) is now the steepest since last April’s “Liberation Day” sell-off (see Exhibit 1). Retail trading in GLD options has also shifted, with call buying activity falling to a 2-year low while call overwriting has picked up significantly. We see a similar dynamic in SLV, but even more bearish, with retail put buying levels reaching their highest in over 3 years....

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