Traders doubt the rally. But they don’t fear another crash.

Investors don’t think the V-shaped recovery in financial markets is poised to become a full-blown check mark.

But neither do they fear a brisk return to a market in the kind of free fall markets endured in the sessions following the announcement of reciprocal tariffs on April 2.

That’s the message from the options market, whose cautious tone has contrasted sharply with the blaring risk-on signals sent from the stock market.

Cboe Head of Derivatives Market Intelligence Mandy Xu said, “We’re not seeing any upside chasing” in S&P 500 options. She flagged that the ratio between the implied volatility of 25-delta out-of-the-money S&P 500 call options versus at-the-money options (or call skew) has dipped, indicating meager demand for derivatives to capitalize on another leg back toward all-time highs over the next month.

While there’s no greed to speak of, there’s a calculated, measured fear: investors aren’t buying crash insurance — as seen by the relatively low demand for very far out-of-the-money put options compared to ones that are closer to the index’s current price — but a comparable measure of put skew is well above call skew.

It’s the first noteworthy divergence between put skew and crash insurance seen to date in 2025. As we recently wrote, traders have good reason to return to focus on run-of-the-mill risks rather than extremely large tail risks, given the Trump administration’s willingness to moderate trade policy in response to perceived financial distress.

Relatively low call skew and rising put skew can have a fairly benign/positive interpretation: you don’t need to chase upside in the options market if you’ve already reengaged by buying stocks. And if you’ve bought stocks, you have a need to hedge downside risk again.

Per Deutsche Bank strategists led by Parag Thatte, equity positioning is moving higher and closer to neutral among discretionary investors, while systematic investors are still very light relative to history.

Put it all together and it’s a pretty nuanced picture of a US stock market that has been anything but nuanced lately, on a nine-session winning streak that seems poised to snap on Monday.