Wall Street Prefers Vanilla Options Over VIX for Hedging

Investors are favoring vanilla options like S&P 500 put spreads over VIX calls for hedging due to cost and reliability concerns, amid a market rally driven by dovish Fed signals and upcoming Nvidia earnings. The steep VIX futures curve and recent flows into long VIX ETPs have influenced this shift, with traders cautious about volatility spikes and the impact of upcoming economic data.