Recent uncertainties surrounding US-China trade relations have prompted options traders to purchase options as a safeguard against significant fluctuations in the US stock market. A meeting between the Chinese and US presidents is scheduled for the end of this month. Currently, the implied volatility of S&P 500 index futures expiring on October 31 is approaching 20, higher than contracts before and after that date. The Chicago Board Options Exchange's Volatility Index (VIX) curve has also shown a similar "inflection point" approaching the month's end. Recently, US President Trump softened his stance on tariffs against China, easing concerns about further escalation in the trade war. Nevertheless, traders remain cautious due to the potential for sudden changes. For instance, after several months of steady gains, the US stock market experienced a sharp drop on October 10, triggered by the president's tough rhetoric on social media, threatening "massive increases" in tariffs on Chinese goods; this news prompted Wall Street traders to sell off, quickly overshadowing the previous market optimism regarding the trade war. Dennis Debusschere, Chief Market Strategist at 22V Research, commented, “Our base case remains that if the presidents of the US and China meet at the end of the month, the situation could potentially ease. However, if the meeting is canceled, the likelihood of escalation will sharply increase.” Similar sentiments were echoed by Andrew Tyler, Global Market Intelligence Head at JPMorgan’s trading division, who stated that from October 31 to November 1, the market “will remain in a high-volatility environment,” anticipating attendance by the two presidents at the Asia-Pacific Economic Cooperation summit. Tyler noted in a report to clients last week, “By then, any agreements will not trigger significant pullbacks.” The demand for safe-haven assets is clearly reflected in KraneShares CSI China Internet ETF, with a market cap of $9.4 billion, as the skew of its one-month 25-delta put/call options is at its highest level since early April, indicating escalating market anxiety from now until mid-November. According to strategists at that firm, the volatility of Chinese concept stocks is increasing due to "tariff panic". An uneasy atmosphere pervades the overall market, with the VIX hovering above 20, a level that usually indicates escalating market pressures. The VVIX index, which measures VIX volatility, closed at its highest level since April on Thursday. Michael O'Rourke, Chief Market Strategist at JonesTrading, stated that stock traders are in for an “interesting few weeks.” Additionally, the Federal Reserve is scheduled to hold an interest rate meeting on October 29. Renewed concerns over credit losses for US regional banks and the potential for a government shutdown have exacerbated uncertainty, increasing calls for crash protection in the coming weeks. For Amy Wu Silverman, Head of Derivatives Strategy at RBC Capital Markets, the recent rise in the VIX index after a prolonged period of calm “was long overdue.” She remarked, “If there's anything different, I think it’s encouraging for those investors who have been pressing the ‘hedge’ button but also seek some monetization assurance.” She added that traders have been buying put options on financial stocks while gradually adding call options on gold. There are signs that US-China trade negotiations are still progressing, which helped the S&P 500 index finish higher during a turbulent week. Despite ongoing uncertainties surrounding trade, potential government shutdowns, and inflation, the benchmark index is currently less than 1.5% away from its all-time highs. Sadiq Adatia, Chief Investment Officer at BMO Global Asset Management, stated, “If viewed from a real money perspective, the market actually hasn’t fallen that much.” He noted that the market has “shaken off” many risks so far this year. However, given the “numerous” risks, he believes volatility will remain elevated by the end of this month.