Traders are growing increasingly concerned that this year's stock market rally may be nearing its end.

The S&P 500 recently recorded its widest weekly trading range since June. Despite NVIDIA's strong earnings and CEO Jensen Huang's repeated assurances that AI is not a bubble, investor nervousness persists. Meanwhile, Bitcoin has lost about a third of its value since hitting an all-time high last month, and worries over the Federal Reserve's rate-cut timeline are intensifying.

Although the S&P 500 remains up over 12% year-to-date, traders are rushing to lock in profits—especially in tech stocks. The cost of options on the Invesco QQQ Trust Series 1 ETF relative to the SPDR S&P 500 ETF Trust has climbed to near its highest level since August 2024.

Tensions in the tech sector peaked last Thursday when early gains following NVIDIA’s earnings report quickly reversed. That day saw the most volatile intraday swing since April 8, when tariff fears triggered a sell-off, with the Cboe Volatility Index (VIX) closing at its highest level since April.

"Anyone who bought puts at yesterday’s highs could retire today," joked Vuk Vukovic, CIO of Oraclum Capital, whose hedge fund is active in short-term options. He noted that stressful market moments like Thursday "are good for us," adding, "If you're a volatility buyer, spikes are when you get the best returns."

Vukovic observed that option sellers only re-entered the market on Friday, pushing the VIX lower. He expects volatility to compress again before Christmas but predicts another surge before year-end.

Rocky Fishman, founder of Asym 500, pointed out that volatility risk premium—the gap between implied and realized volatility—remains relatively high. In a client note, he highlighted that the six-month VIX premium over the S&P 500’s six-month realized volatility is nearly unprecedented.