$VIX drops 13% but tail risk stays high, hedgers loading crash insurance

Everyone’s watching the $VIX. Almost nobody’s watching the VVIX.

$VIX drops 13% and the timeline relaxes. But options on the $VIX itself? Still at the 88th percentile. That’s institutional hedgers quietly keeping their crash insurance fully loaded.

Surface calm. Expensive tail protection underneath. That’s not contradiction. That’s a tell.

$IWM round-tripped its entire intraday rally today. Gapped up, faded back to flat. Mega caps holding while small caps get sold into strength is the narrowest possible version of “risk on.”

I think $SPY fades back toward 660 by Friday. Wednesday’s FOMC is being priced as a binary event, and the positioning into it looks like everyone expects the same outcome.

The footnotes are louder than the headlines right now. What’s your FOMC read?