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Options Show No Black Swan in Emerging-Market Stocks

The smallest stock price swings and fastest economic growth in three years are convincing options traders that developing-nation equities are safer than ever relative to U.S. shares.

The MSCI Emerging Markets Index’s historic volatility, a gauge of price swings during the past three months, fell to 12.1 last week, the lowest level since July 2007, according to data compiled by Bloomberg. The cost of options insuring against a drop in the iShares MSCI Emerging Markets Index exchange-traded fund has declined to a record versus those tied to the Standard & Poor’s 500 Index, the data show.