Investor fear levels are rising: The cost of a 5-year put option protecting against at least a -55% drop in the S&P 500 has risen to 46 basis points, the highest since the April sell-off. Excluding April, this is the highest level in at least 2 years. This means investors are now paying the most in 6 months for long-term protection against a decline on the S&P 500. Overall, the total Dollar value of options and credit protection contracts traded hit a record last week, according to Goldman Sachs. Hedge demand is rising in the equity market.(The Kobeissi Letter)