One of the more intriguing aspects of 2021 has been the relatively high levels of expected volatility in the equities markets. The VIX, a widely-used barometer of broad market volatility, has been consistently higher throughout the year compared to its long-term median. Despite the high levels of anticipated volatility, the market hasn’t yet seen that much action.
Sure, there’s been some big up and down days. Overall though, the implied volatility (as given by the VIX), has been way higher than the actual or realized volatility. It’s possible the VIX has been unusually high because investors have been more proactive about hedging their portfolios.