traders work on the floor of the new york stock exchange nyse in new york city us july 12 2021 reutersbrendan mcdermidfile photo new york sept 20 reuters  us stocks are experiencing the biggest wave of volatility in months but options traders are showing little appetite for more protection a sign that at least some of them believe the current selloff will be shortlived the cboe volatility index vix known as wall street’s “fear gauge” stood at 275 on monday its highest level in more than four months as concerns about heavily indebted chinese property company evergrande added to jitters over global growth the sp 500 tumbled 25 on monday on pace for its largest decline since jan 27 options market analysts said there were few indications that investors were putting on trades to shield their portfolios from further market drops at least for now however the selloff appears to me orderly somewhat expected and not panicky said susquehanna international group’s chris murphy the vix and the term structure and skew those were all pricingin a degree of panic said murphy referring to various gauges of investor expectations for volatility the vix has lingered around the 20 level in recent days pointing to elevated expectations for nearterm stock market gyrations even as stocks remained close to record highs september has historically been a tough month for stocks and the sp has gone more than 300 calendar days without a selloff of 5 or more read more various measures of skew a gauge of demand for puts versus calls have also been elevated for months now pointing to heightened investor expectation for a sharp pullback in stocks read more its going to probably take a little bit more than one day for everyone to start piling into hedges murphy said instead many investors appeared to be focused on reaping gains on existing hedges that would have profited from a fall in stocks analysts said remember that the market was extremely wellhedged coming into this move down amy wu silverman equity derivatives strategist at rbc capital markets said in a note we are seeing hedges monetized and investors actually purchase upside via call spreads in sp she said buying upside call spreads is a relatively inexpensive options strategy that allows investors to benefit from a rebound in stock prices stock market selloffs over the last few years have been fleeting that raises the urgency of monetizing  or taking profits from  existing hedges before a rapid rebound in prices can erase the gains analysts said the market selloff that escalated overnight we believe is primarily driven by technical selling flows in an environment of poor liquidity and overreaction of discretionary traders to perceived risks analysts at jp morgan said in a note they said they viewed the selling as a buying opportunity reporting by saqib iqbal ahmed editing by ira iosebashvili and sonya hepinstall