Earlier this week, in “Where’s The Iran War Stock Crash?,” I highlighted the disparity between, on one hand, intense angst about what might happen “tomorrow” and, on the other, what actually happened “today.”

The market manifestation of that disparity is a divergence between implied vol and realized vol, with the former elevated and the latter not, at least in the equities context.

I wanted to briefly revisit that mid-week because it has implications for vol-supply, which in turn matters for… well, everything. Consider the tables below from Nomura’s Charlie McElligott.

You’re looking, obviously, and the implied-to-realized vol ratio %ile’s boxed in red. For equities (and also for the USD junk ETF and the US long bond ETF), that ratio’s 75%ile and up across countries, sectors and styles.

The snapshot, Charlie noted, is from Tuesday afternoon, and it shows the extent to which implied vol was pricing “crash panic” while realized vol “snoozed” — because a bifurcated market defined by low correlation and high dispersion (i.e., offsetting moves), can’t manifest that panic, particularly not on close-to-close measures.

If you’re in the business of selling insurance, that’s a good setup. Premiums are very high — implied’s “priced for chaos,” as McElligott put it — but the chaos never materializes — realized’s “still saying ‘nothing ever happens.'”

Said differently, those nosebleed rankings for the ratio of implied vol to realized vol suggest the market’s “over-billing for protection,” to quote Charlie one more time.

So, what? So sell insurance, maybe. Just not on any oil tankers in the Strait of Hormuz, where realized vol could catch up to implied pretty quickly if you run across a mine. And I’m not sure the reinsurance policy’s worth the paper it’s written on.

(Not investment advice.)