Investor Demand for S&P 500 Downside Protection Plummets 75% Since March

Investor demand for S&P 500 downside protection has collapsed, with the three-month single-stock put-call skew falling to 0.04 — the fourth-lowest reading in 20 years. The hedging gauge has dropped about 75% since March as traders reduce crash insurance amid a record S&P 500 rally (the index printed fresh all-time highs and has gained over 16% since March 31). A May 21 geopolitical thaw reportedly funneled roughly $500 billion into US equities, reinforcing the risk-on stance. Market implications: cheaper protection and compressed skew signal broad complacency and increased upside exposure, which historically favors Bitcoin and high‑beta assets, but also raises vulnerability if the positive macro narrative (e.g., a US‑Iran agreement) stalls.