Nasdaq 100 options traders are now paying more for upside bets than for downside protection, an inversion that shows just how confident the market has become. The put-to-call skew has collapsed from stress-era highs to a historic low, and some readings have flipped negative entirely.
The Nasdaq 100 options market just did something it rarely does: investors bid up calls more than puts. On September 15, QQQ's 25-delta call implied volatility stood at 22.8%, while put IV sat at just 16.7%, an inverted skew of negative 6.1 percentage points. Traders, in other words, are paying a premium for upside bets over downside hedges — the opposite of how options markets typically price.
How far the skew has fallen
The NDX put/call implied volatility spread fell to roughly 4% by late May 2026, down from about 15.5% during the tariff-fear and recession-chatter stress period of early 2025 — a nearly four-fold compression. By August 2026, the 1-month put-to-call skew had dropped to 1.15 points, the lowest reading since April 2025.
Goldman Sachs' volatility desk flagged the dynamic in early June 2026, calling the options skew "broken" at 18-month lows. The desk noted that downside protection had become remarkably cheap against the backdrop of an AI-driven market rally that showed few signs of slowing.
Why analysts flag the risk of complacency
Low skew is not new — the late stages of the 2020-2021 bull market saw a similar drop as put demand dried up while tech stocks marched higher. But that period ended in 2022, when the Nasdaq 100 fell roughly 33% from peak to trough, catching underhedged investors off guard. Low skew didn't cause that decline, but it left fewer portfolios cushioned when it arrived.
What worries analysts now is the degree of the inversion. A negative 6.1 percentage point spread between call and put IV goes beyond thin hedging demand — it signals active speculation on further gains. Because downside protection is historically cheap, the cost of being wrong about the bull case is relatively low for anyone willing to buy puts. Meanwhile, crowded upside positioning means a single catalyst could trigger a sharper-than-expected reversal as dealers unwind hedges and call holders rush for the exit at once.
Source: Crypto Briefing
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