Fixed-strike volatility openings saw a mild uptick on Wednesday, but the gains were quickly pared back throughout the session. According to the GS vol desk, fixed-strike vol opened firmer but faded through the day, finishing only marginally higher. The term structure flattened as the front end outperformed, while skew steepened and vol-of-vol moved higher.

Despite the mild increase in fixed-strike volatility openings, AI names led the decline in the NDX volatility index, with GS estimates suggesting that dealer long gamma is now concentrated mainly above spot. This suggests that traders are increasingly bearish on the outlook for these names, which could be a sign of a potential correction or downturn in the market.

The flattening of the term structure and the steepening of skew are also worth noting. The flattening of the term structure indicates that the yield curve is no longer as steep as it was previously, which could be a sign of a slowdown in economic growth. Meanwhile, the steepening of skew suggests that traders are increasingly concerned about the potential for large losses in the market, particularly in the event of an unexpected event or announcement.

Overall, while fixed-strike volatility openings saw a mild uptick on Wednesday, the gains were quickly pared back and the market remains uncertain and volatile. Traders are likely to remain cautious and vigilant in the coming days and weeks, as they await further developments in the economic and geopolitical landscape.