Global Equity Volatility Insights: Underestimate FOMO at your own risk

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Global Equity Volatility Insights: Underestimate FOMO at your own risk

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Global Equity Volatility Insights

Underestimate FOMO at your own risk

In bubble-builds, FOMO can trump macro 19 May 2026

Renewed inflation concerns and rising long-end yields have slowed the breakneck US Equity Derivatives

equity rally, but numerous signs point to equity resilience and concerns over further Global

upside. As one example, a striking disconnect has emerged between steep put skew in

rates vol and historically flat call skew across equity indices & sectors. We note that in

bubble-like markets, FOMO can overwhelm rising yields & macro headwinds, as seen in

the Dotcom bubble when Nasdaq surged with 30y yields. Near term, the clash between

macro risks and a bubble-prone market is pushing risk into both tails, making options’

asymmetry valuable. TLT put spreads offer historic ~8x max payouts to hedge a further

yield rise, while QQQ call spreads and NDX-USDGBP hybrids offer cheap, limited-risk Global Equity Derivatives Rsch

BofAS

upside participation. Upcoming mega-cap tech IPOs will likely be another driver of tech

Lars Naeckter >>

enthusiasm, and we reiterate NDX over SPX in delta and vol to hedge growing concentration Equity-Linked Analyst

risk and rising bubble-era boom/bust dynamics (see 6-May-26 GEVI for more details). Merrill Lynch (DIFC)

Riddhi Prasad >>

UK-specific risk creates opportunities in banks & hybrids Equity-LinkedMLI (UK) Analyst

UK political risk is reasserting itself as a meaningful macro driver, with Labour Arjun Goyal

leadership uncertainty and associated fiscal divergence feeding into Gilt yields, macro Equity-Linked Analyst

volatility and renewed Sterling weakness. This uncertainty creates attractive trading

Benjamin Bowler