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Violent S&P 500 Reversal Hammers Traders Positioned for Slump

  • Stocks opened lower on inflation report, then rallied back
  • ‘They got absolutely hammered,’ IUR Capital’s Ryan said
A trader works on the floor of the New York Stock Exchange.

A trader works on the floor of the New York Stock Exchange.

Photographer: Michael Nagle/Bloomberg

The stock market’s shocking reversals Thursday after a hotter-than-expected inflation report caught many on Wall Street by surprise. Just ask IUR Capital’s Gareth Ryan. 

Futures contracts on the S&P 500 and Nasdaq 100 indexes plunged after the consumer price index rose more than anticipated in September. Ryan, a managing director at the London-based investment advisory firm, was watching the profit-and-loss statements for some of his clients who were short the futures going into the CPI report. It looked like a winning bet -- and it was, until the markets started moving against them.