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A key tech-stock volatility metric that options traders have been monitoring all year is reversing, and it is the reason artificial intelligence equities are losing their stranglehold on U.S.
The metric sits inside the options market, where traders price uncertainty in sector-specific contracts. When it reverses, the signal is that one theme's concentrated grip on broader market movement is breaking.
Volatility gauges of this kind serve as a read on where market risk is concentrated. Artificial intelligence stocks have held an outsized position in that read for much of this year, setting the tempo for U.S.
Options desks have had the specific tech-stock metric in view throughout that period, and its current reversal is what market participants are pointing to as evidence the dynamic is shifting.
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