Market stress is surging at a rapid pace: The spread between the average 9-month volatility of S&P 500 stocks and the S&P 500 index's 9-month volatility is up to 18 points, the highest since 2008. This spread has DOUBLED over the last 2 years, suggesting many market sectors are experiencing severe volatility despite the broader market appearing relatively calm. This also means options on individual stocks are far more expensive relative to index options than at almost any point in history. Furthermore, the S&P 500's 1-month put/call volatility skew ratio is up to ~1.65, the highest since 2021. In other words, put options are now 65% more expensive than call options. By comparison, this ratio was ~1.15 at the beginning of 2024. Volatility is building under the surface.(The Kobeissi Letter)