For the past several years, US stock investors have hedged their portfolios largely by looking at their calendars. Fed meetings, CPI prints, elections – whenever an event appeared on the horizon, investors would look to short-dated options to protect against the possibility of volatility.  

More recently though, that playbook has become less effective. Since last year, some of the biggest volatility events have been harder to pin to specific dates. That’s because they’ve been driven less by the calendar, and more by geopolitics, policy uncertainty, and liquidity shocks. When it strikes, volatility has also tended to persist rather than snap back quickly.

“In contrast to periods like August 2024, where long-volatility positions technically worked but spot reverted too quickly, 2025 saw longer-lasting moves with better liquidity, allowing hedges to actually realize P&L,” says Robby Knopp, co-head of the S&P options desk at Optiver.

That experience has influenced investor behavior. Demand for one- to two-year protection has increased, according to Hugo Bernaldo, senior cross-asset derivatives trader at Optiver. Through the second half of 2025, mid-curve and back-end S&P 500 volatility stayed firm, even as the index rallied. Those elevated levels have carried into early 2026, as shown in the chart below. For many investors, longer-dated volatility is no longer an afterthought.

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