Ok, so November 5, 2026, was obviously a disaster on Wall Street.
I mean, not “a debacle for the ages” or anything like that (although the move in semis was indeed historic), but it’ll stick out on a chart. And it’ll come up from time to time when we relive the 2026 US midterm elections.
As noted, the biggest story was the wipeout in semis, which suffered their worst single-session decline since March of 2020. Excluding the original COVID panic, Thursday was the worst day ever for the SOX.
There’s the chart, in all its rubbernecking-a-fatal-tractor-trailer-accident “glory.”
I won’t dwell on that here, because I already dedicated an entire article to it. For the bloody “deets,” go read “Um, Excuse Me, But Your Chips Are Bleeding.”
The selloff on the Nasdaq 100 was also the largest since March of 2020. Prior to that, you have to go all the way back to December of 2008, when capitalism itself was teetering on the brink of extinction to find a single-session decline as large as Thursday’s on the big-tech gauge.
There’s that chart. And, again, it’s pretty rough on the eyes, especially given the implied paper wealth destruction, a “big league” $2.5 trillion, or thereabouts.
Implied vol on the index hit the highest since the chaos around “Liberation Day.” Both skew and put skew (the latter’s crash protection) on the Mag7 names inflected vertical, indicative of a grab for downside.
Speaking of tail hedges, the VVIX, which dove on Wednesday as the election event risk ostensibly cleared (it wasn’t clear!), rose a staggering 45 vols.
“Perversely after yesterday’s hedge unwind, today we completely revers[ed] course and then some,” Nomura’s Charlie McElligott said, describing vol-of-vol as “wildy puckered.”
Charlie ran some numbers and discovered that the VVIX outperformance versus the VIX on Thursday counted as a near 95%ile event going back 21 years.
As to the vol control point question posed by a reader (namely, “How much is the target vol universe likely to sell on the reset higher in trailing realized given these outsized close-to-close moves?”) the answer’s a lot.
But the key, as McElligott noted, is that vol control by definition deleverages on a lag. So today’s selling from that universe was actually a product of yesterday’s implied supply.
There’s the realized vol chart and your “t+” table. One-month realized is now 95%ile on a one-year lookback.
“Target vol generally executes on a t+1 or even +2 lag so as to validate market conditions and not contribute to the negative feedback loop it’s built to react to,” Charlie wrote.
The implication is that there’s a latent equity supply impulse here north of $60 billion.
“From an execution reality perspective, they [were] likely executing yesterday’s -$25 billion for sale today, on a lag, where today’s move is now further loading in the queue,” McElligott added.
