There is currently a record break in the trading pit.

Forget about two cities. For traders in the U.S. stock market, it’s two different worlds.

If you’re tracking the index’s rise, S&P500it’s been slow and steady as volatility falls to its lowest level since January. CBOE Volatility Index (VIX) It hit 15.6 on Thursday, compared to 35 in March, when geopolitical concerns caused daily whiplash in the market.

When you’re trading individual stocks, the roller coaster ride never stops, and in many cases, especially in tech stocks, it only gets crazier.

CBOE’s S&P 500 component volatility index, VIXEQ, which aggregates VIX-like measures for specific companies and weights them by market capitalization, is near its highest level in more than a year. The spread between VIXEQ and VIX is currently at its widest since January 2023, going back to the exchange’s stock-specific data.

“What’s striking about the market right now is how calm things are at the index level, even though individual stock volatility is near a one-year high,” Mandy Hsu, head of derivatives market intelligence at CBOE, said in an email. “Stock dispersion has increased dramatically and correlation levels have fallen to historic lows as traders shift focus from macro risks (such as Iran) to stock-specific catalysts such as AI and earnings.”

The spread of volatility between individual stocks and indexes makes a big difference for options traders who make risk and reward decisions based on the rapidly changing prices of individual contracts.

The clearest example is in the semiconductor field. VanEck Semiconductor ETF (SMH) At about 50%, it’s near its highest in a year and more than three times higher than the S&P 500, but still lower than many individual stocks. micronthe implied volatility is 101%.

One implication is that the amount of dollars spent on semiconductor options trading is surging. Total option premiums traded across semiconductors tracked by Citadel Securities are 25% higher than the previous record dating back to March 2024 and five times the historical monthly average, according to a message from Scott Rabner, the firm’s head of equity and equity derivatives strategy.

So far, there is not much evidence for traders to think that the dynamics of split volatility will change.

Small traders have been willing to buy expensive individual stock contracts in hopes of prolonging the bull market, and so far it’s mostly worked out. And for index products such as: State Street SPDR S&P 500 ETF (SPY)The most popular trade on Thursday was selling puts, a bet that generally favors the VIX continuing to fall. Sentiment for the SMH ETF is in the middle, with put buys dominating at record levels.

“When you have a historical break like this, I think there’s a good chance there’s going to be a little bit of a broadening,” Noel Smith, chief investment officer at Convex Asset Management, said by phone. “I don’t see things breaking down until the market absorbs the big IPOs like SpaceX and Anthropic.”