High-Yield Skeptics Push Bearish Options Bets to Records: Chart

A heavy appetite for corporate debt belies signs of fear seeping into the high-yield market, despite subdued levels of realized and implied volatility. Total open interest in put options for the largest junk ETF -- the iShares iBoxx High Yield Corporate Bond ETF, symbol HYG -- has hit a record of almost two million contracts. “With the decline in crude this year, we are starting to see energy high-yield spreads rise,” writes Pravit Chintawongvanich, head of derivatives strategy at Macro Risk Advisors. “HYG’s weighted average spread, meanwhile, has been flat this year.”

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