Bank of America sees further upside in equity volatility (vol) and sends a warning on the artificial intelligence hype.
With the VIX still near 17 and the S&P 500 sitting within striking distance of all-time highs (and a 2025 median of 17.3 vs 14.6 in 2024), equity vol has seen a significant uptick in 2025. However, more progress has been made in implied vol, with index realised vol remaining constrained by low stock correlation, according to a research note released by BofA on 10 November. We recommend risk-limited upside exposure via call spreads on selected names with high beta to the Nasdaq 100 &lsquo