Morgan Stanley Derivatives(@MgnStnlyDerivs):Oil is setting the direction of stocks – and the equity market isn’t priced for a rally in the event oil moves lower, at least in small caps: short exposure in Russell 2000 stocks is just off the highs, and 1-month 105% implied volatility on the Russell 2000 is in the 12th 5Y percentile.

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Morgan Stanley Derivatives@MgnStnlyDerivs

2026.09.25 16:09

Oil is setting the direction of stocks – and the equity market isn’t priced for a rally in the event oil moves lower, at least in small caps: short exposure in Russell 2000 stocks is just off the highs, and 1-month 105% implied volatility on the Russell 2000 is in the 12th 5Y percentile.