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Nomura's McElligott notes that after we realized his prediction that the outsized long positioning in lower VIX would turn into a "Vol Expansion phenomenon" which we saw this week (but not he notes a "SPX Down trade"), we are "again seeing a bit of •Cool Down•on the macro", with " SPX Dealer Gamma [flipped] back •Long••and well-insulated" (first chart).
But he notes now "the preference is out of the VIX stuff and instead on the SPX side with Put Spreads, as Skew / Put Skew both steepened significantly (1m Skew 97%Ile), partially as a function of Put demand, but also too on Calls (esp OTM) bombing-out, with 1m Call Skew now just 1%ile" (second chart(s)).


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