Analysis: PPI and CPI have been implemented one after another, and market volatility expectations have dropped significantly.

Adam, a macro observer at Greeks.live, wrote that as PPI and CPI have landed one after another, the market’s expectations for volatility have dropped significantly, which in turn has pushed the IVs of each major term to decline significantly. Short-term IV fell by more than 20% this week, while medium and long-term IV also fell by about 5%. This kind of decline in implied volatility IV is relatively rare in the options market. Sellers, mainly institutions, can recoup a lot of profits in this round of decline to make up for the hedging losses caused by the huge fluctuations in the past month. Now that the term structure has returned to a solid structure of far high and near low, the market may settle for a period of time.