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2025年将是波动性之年?来看看机构们的“骚操作”

Will 2025 be a year of volatility? Let's take a look at the "wild moves" of the Institutions.

Golden10 Data ·  Dec 16 17:59

Many major banks are preparing for 2025! Bank of America predicts that next year's market will feature a long period of calm followed by sudden and intense volatility.

It is expected that the market will remain calm in 2025, but investors should remain vigilant as uncertainties surrounding Trump's tax and tariff policies could lead to market fluctuations similar to those seen in August of this year.

Strategists from Bank of America, JPMorgan, and BBVA anticipate that sustained Options Selling will generally suppress volatility, with JPMorgan expecting an average Cboe Global Markets Volatility Index (VIX) of around 16, while the average for 2024 is about 15.5. However, BBVA points out that a series of factors—including rising uncertainties over US tariff policies, geopolitical tensions, excessive concentration and valuations, signs of financing market pressure, and a weak labor market—could trigger greater volatility.

BBVA strategist Michalis Onisiforou wrote in a report to clients, "Sustained growth and the increasing prevalence of volatility selling strategies should support a structurally low volatility environment in Europe and the USA. However, some factors suggest that broader levels of volatility will rise, and volatility will erupt more frequently."

Bank of America believes that the market is characterized by entering a prolonged period of calm, followed by "fat tail" events (i.e., sudden and severe fluctuations). The institution expects that the frequency of weak shocks to the S&P 500 Index will increase fivefold compared to the past 80 years and states that another significant shock event covering the entire index may be overdue.

Zero-day Options, quant investment strategies sold by Banks, and Selling Options to enhance ROI through ETFs will increase market supply, leading traders to hold more gamma positions, which often suppresses market volatility as traders need to buy more Futures or Stocks when the market declines and sell when the market rises to maintain position balance.

JPMorgan also points out that although technical factors are suppressing volatility, macro indicators suggest that volatility should be higher, with data showing that the reasonable average level for VIX is about 19. While investors in the USA and Europe will continue to Sell volatility, in Asia, market traders may have a higher demand for volatility.

Pierre de Saab, a partner and investment director at Dominice & Co. Asset Management, stated, "The current state of low volatility may only be temporary: investors have absorbed all the good news stemming from the impending Trump policies, but they are ignoring the potential negative impacts these policies may have. I expect the upside potential in the market for 2025 to diminish, and the risk of serious disruptions to the market due to Trump's unconventional policies will be greater than in 2024 or 2017."

UBS Group strategists pointed out that the policy offset between tariffs and tax cuts could lead to greater volatility. Max Grinacoff, head of U.S. equity derivatives research at the bank, stated, "In the first half of next year, we might directly enter a relatively high stock volatility environment."

UBS believes that potential tariff escalations would cause the Federal Reserve to adopt a more accommodative policy, making its policies more certain, thereby reducing bond volatility. The company advises investors to finance by selling iShares 20-plus Year Treasury Bond ETF and use this to establish straddles on the S&P 500 Index expiring in June.

Strategists at Industrial Bank also believe that the room for declining volatility is shrinking. "Our model predicts that volatility will rise in 2025 and 2026," said Jitesh Kumar, a derivatives strategist at the bank. "We recommend buying volatility on dips."

Bank of America and JPMorgan stated that one low-cost method to hedge against the risks of significant sell-offs is to buy VIX calls and sell S&P 500 Index puts. The volatility index often responds quickly to market turmoil, with long positions acting as a buffer, and traders can also profit from rising stock prices by collecting premiums from S&P 500 Index puts.

JPMorgan and Bank of America are strongly recommending a custom basket of spread trades. Bank of America noted that the vulnerability of stocks at record highs (or an unusually sudden volatility compared to historical standards) is a driving force of the stock market. "In 2024, the vulnerability shock of the largest stocks in the S&P 500 Index reached levels not seen in over 30 years, and if the AI boom continues, there are almost no signs of it fading," wrote Bank of America strategists, including Benjamin Bowler.

Following a surge of interest in 2024, cross-asset trading may still be popular at the beginning of 2025. JPMorgan highlighted a binary option that bets on a decline in the Euro Stoxx 50 Index and a rise in U.S. 10-year yields, adding that this is used to bet on the "upcoming Trump administration's more aggressive execution of campaign promises regarding the deportation of illegal immigrants, tariffs, and nearshore business."

Antoine Bracq, head advisor at Lighthouse Canton, a family office in Singapore with a scale of 3.5 billion dollars, stated, "We are cautious about the potential impact of higher interest rates and new tariffs. While risk assets may maintain strong momentum longer than expected, we now see an opportunity to protect your stock investments by leveraging low volatility levels."

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