Investor fear levels are rising:
The cost of a 5-year put option to protect against a decline of at least -55% in the S&P 500 has risen to 46 basis points, the highest level since the April sell-off.
Excluding April, this is the highest level in at least two years.
This means that investors are now paying more in 6 months for long-term protection against a decline in the S&P 500.
Overall, the total dollar value of traded options and credit protection contracts reached a record high last week, according to Goldman Sachs.
The demand for hedging in the stock market is increasing.
