Appetite for hedges is rising: The cost of hedging against a 10% drop in the Nasdaq 100 ETF, QQQ, relative to bullish bets has jumped its highest since the 2022 bear market. The relative cost of hedging has risen ~40% over the last 5 months. As a result, downside protection on QQQ is now higher than it has been in all but 8% of recent cases. Investors are adding hedges to protect long equity holdings from a potential market drop. This also signals growing caution ahead of the long anticipated September Fed meeting next week. All eyes are on the Fed.(The Kobeissi Letter)