Traders Buy Hedges ‘Like World Is About to End’
- Demand for puts versus calls surges with volatility still low
- Fed, ECB, U.K. election and trade could shatter market calm
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U.S. stocks have barely budged this week, but the calm in equities contrasts with a frenzied bout of hedging in options markets.
Faced with a loaded event calendar that will bring central-bank decisions, trade deadlines, a U.K. election and possibly an impeachment vote, traders are piling into protection “like the world is about to end,” quipped IPS Strategic Capital head trader Patrick Hennessy on Twitter. Meanwhile, the S&P 500 drifted for a second straight day in thin volume.