"Earlier this month, Deutsche Bank identified low volatility as one of the most crowded trading strategies."
“Low volatility appears to be as crowded as it was during the financial crisis when investors simultaneously plunged into defensive, low volatility stocks,”
"It’s when you think it’s safe and it starts going down that you get mass selling.”
S&P 100 Mega-cap index with S&P 100 implied volatility
The U.S. stock exchanges were privatized in the middle of the last decade. From that point forward, the stock market went full casino as High Frequency Trading bots were "co-located" inside the Exchange data centers, to maximize Exchange commission revenue. This allowed HFT to have an enormous advantage over and above regular investors by reducing "latency" which is the speed of light as it travels over long distances and the friction caused by router hops, switching, and other resistance. HFT replaced traditional market makers who used deep wells of capital to create orderly markets. Traditional market makers often held positions overnight and otherwise accepted risks that HFT doesn't take. Two massive limit down flash crashes later, and nothing has been done to fix the new "system".