Investors are increasingly seeking downside protection: Open interest in Volatility index, VIX, call options relative to put options is up to ~3.1, the highest since July 2025. This is also the 2nd-highest level since February 2025, before a market correction started. Put differently, traders are positioning for higher volatility at roughly a 3-to-1 ratio versus lower volatility. Furthermore, the spread between the VIX and the S&P 500's 20-day realized volatility is down to around zero, the 2nd-lowest in at least 2 years. This suggests protection against a future market selloff remains historically cheap. Investors are bracing for more market volatility.(The Kobeissi Letter)