The Inverted Volatility Surface

In markets, the inverted volatile term structure speaks to the notion that short data of insurance is in most demand. Let's use the COVID market crash as an example: Up until February 1st of 2020, realized volatility on the SPX was tracking at 10 for the year. By April 1st, this same metric had exploded to 71%. The VIX reached a new all-time high, surging to 82.69 on March 16th of 2020. If you were long equities during that awful period, the market moves are so violent that you'd pay nearly anything for a hedge.