Traders have absorbed $2 trillion in new equity, particularly from SpaceX, which has seen its market cap rise to nearly $2.5 trillion after a 13% increase in its shares. This has alleviated fears that had gripped the market just days prior, when the Cboe Volatility Index (VIX) was rising due to concerns about the market's ability to handle the influx of new stock.
The Nasdaq 100 rose 3% and the S&P 500 increased by 1.7%, approaching its recent record, with semiconductors leading the charge with a 4% gain to an all-time high. Ed Tom from Cboe noted that the VIX fell below 16, indicating a significant decrease in volatility expectations, driven by the unwinding of protective hedges.
Despite ongoing bearish sentiment in semiconductor options, the overall market sentiment appears to be shifting towards a more bullish outlook, as evidenced by the trading patterns in VIX options. As SpaceX options are set to list, traders are likely to remain active, particularly given the popularity of Tesla options among retail investors