Institutions pull out when Interbank lending starts collapsing if I understand correctly... Watch India soon, then HK/China. Only those playing in those markets see it real time. India is the closest to pop right now, but yea it's happening any month now... Bunch of EM's in really really bad shape at the moment, and it's not changing anytime soon. A lot of money due, and nobody has it
This reference to EM contagion is part of the reason why dumb money is directly buying into the same volatility that smart money happens to be shorting.
The point is none of these guys are shorting the futures outright with no hedges attached. The pros always have two sides to a story and the trade at play atm, for example, is to short volatility AND short equity. The problem is retail only sees ONE side (and have HUGE contrarian egos): pros short vol? Time to go long VXXB! pros short stocks? Time to go "buy at a great value". They think the trade was put on to speculate on direction when in reality it was to minimalize directional risk. But, hey, that's why lots of folks get confused when sailing in an ocean full of icebergs.
Why is the 25-delta RR at -300? Because portfolio hedging took the place of dynamic hedging (long equities & short big spooz). You can tell nothing other than the public is long. It's no more a signal than that -300 skew.