GS Vol Views 19 Aug 2026

GS Stankard - Vol Views 19 Aug 2026 Stankard · Goldman Sachs · Analyst, FICC & Equities Wed 19 Aug 2026, 12:45pm ET

GS Vol Views is the derivatives desk's periodic update on flows, ideas, and content. Open to feedback on what might be most useful.

Overview: Even in the heart of August, the equity vol complex remains very interesting. The most notable dynamic has been the sharp vol reset. Our flows meanwhile have seen an uptick in index hedging, though client sentiment remains composed -- our panic index sits in the 14th%-ile over the last 10 years.

With 2Q earnings revealing a strong fundamental backdrop and technicals still largely supportive, we view the path of least resistance as higher from here. That said, we think it is prudent to add protection along the way and prefer to express this via outright SPX puts or SPX lookback puts.

Key earnings return health of the consumer to focus this week, with the FOMC minutes also garnering attention -- the implied move through Friday remains low at 0.70%.

I) We have experienced a dramatic compression in single stock volatility -- SPX "avg stock" 1m vol has reset from ~44v mid-July to ~33v last (near YTD lows).

II) GLD saw a ~10% rally to start August and we continue to see demand for near-term upside convexity. For the fundamental story, GIR recently reiterated its gold forecast ($4,900/toz end-2026) with risks skewed to the upside.

III) AI-demand is still intact though the ferocity has abated recently, leading to some notable restructuring of prior positions. Ex: GS cust sold 30,000 MSFT Sep 525/570 call spread to buy 15,000 2Oct26 505/550 call spread.

IV) DRAM fell more than 8% yesterday and we saw clients use options to buy the dip. Ex: GS cust bought 8k DRAM Aug 60 Calls.

V) Collars and risk reversals continue to screen attractive given normalized put-call skew for the average single stock in the S&P is still exceptionally flat, sitting just off 20-year lows. For these structures, we have seen a recent tilt towards both Financials and Energy (XLF, XOM, BAC, WFC, GEV etc...).

VI) Trade Idea -- WMT Protection -- ahead of EPS (Thurs) given high investor uncertainty and our cash desk being better for sale qtd. WMT Sep 30d put spreads offer ~5x leverage.

I) Though client sentiment feels composed, our recent index flows have seen buyers of skew in the front- end and belly of the curve. After consecutive days of demand, near-term SPX normalized put call skew has steepened off local lows to the 36th%-ile on a 10-year lookback.

II) That said, broad tech optimism remains prevalent, and clients continue to lift QQQ upside. Ex: GS cust bought 18k Oct 770/800 call spreads.