Growing Complacency

I have become comfortably numb
--Pink Floyd

Stock market rallies invite complacency. Higher prices make money manager less prone to purchase downside protection. The price of that protection therefore falls.

Moreover, lower volatility can nudge managers into taking more risk thru use of leverage, creating a state of 'compression' w.r.t. volatility.

Currently vols suggest complacency is reaching noteworthy levels. Knowing full well that volatility indexes are not effective timing mechanisms, I bought some INTC puts this morning given the price discount.

position in INTC