Investors are abandoning hedges in order to chase soaring stocks, as demand for protection against a stock market rally has fallen to the lowest level since US President Donald Trump's capitulation on tariffs last year. Indexes have rallied to record highs, driving a significant shift away from protective options. The one-month put-to-call skew on the S&P 500 Index fell to its lowest level since April 2025, signaling that traders are now more focused on capitalizing on the rally than on shielding their portfolios.

The concept of skew, which measures the implied volatility of downside puts versus upside calls, has declined significantly, reflecting a growing preference for aggressive equity exposure over downside protection. With the rally continuing to push indexes to new highs, many investors are taking on more risk in the hopes of capturing even greater gains.