Reading Volatility Expansions

Markets alternate between compression and expansion. When realised volatility spends long periods below its historical range, positioning tends to cluster — and the eventual break often travels further than participants expect.

Our research treats volatility not as a number but as a regime. We track how volume behaves during compression, where derivatives positioning concentrates, and how price responds at structural levels. The goal is not to predict the direction of the break, but to understand the conditions under which expansion becomes probable and how exposure should be sized when it arrives.

This is an ongoing area of internal study. We share these notes to document how we think — not to offer trading advice of any kind.