GS Lee Coppersmith August re risking

US EQUITIES - August re-risking Lee Coppersmith · Goldman Sachs · US Equities Sat 15 Aug 2026, 12:52pm ET

In what was a quiet week by 2026 standards, re-risking continued while equity volatility reset sharply lower.

The most important development remains the collapse in single-stock volatility – and the resulting pain in dispersion. Average S&P 500 single-stock 1-month implied vol fell another 2.7 points this week, bringing the decline from its July peak to 12 points. It has now fallen in six of the last seven sessions and sits at its lowest level since January.

Dispersion has been caught directly in the crossfire. The damage has come primarily from the collapse in single-stock implieds – not the usual explosion in index volatility. As positions continue to get reduced, investors sell single-stock volatility and buy back index volatility, reinforcing the decline in singles while limiting the reset in index vol from an already low level.

The question is whether singles have now cleared enough, or whether the market is entering a more durable regime of cheaper idiosyncratic optionality. The desk’s view is that the positive asymmetry in being short singles volatility has largely disappeared. If adding equity exposure here, owning index volatility alongside it increasingly makes sense.

That shift is already showing up in our conversations. We are seeing more interest in long correlation, while demand for dispersion has migrated toward limited-loss formats. In single stocks, the focus has been on knockout calls as inexpensive overlays against recently purchased delta, as well as worst-of calls where there is a fundamental reason for correlations to hold.

Notably, the volatility reset has been accompanied by genuine buying. Our PB data shows hedge funds have now net bought global equities for three straight weeks, with the largest percentage net buying in six months. In the US, funds bought equities every day this past week and at the second-fastest pace of the past year. Single stocks saw their largest dollar net buying in roughly five months, driven primarily by new longs rather than short covering.