, Columnist
Traders Prepare for Death of a Junk Rally
A revamped derivatives index benefits short-sellers.
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Many traders don't trust the rally in riskier debt right now, and some are plotting ways to bet against it.
The credit cycle seems to be souring, with corporate earnings generally weakening, and central bankers are seemingly more desperate. Yet riskier corporate debt is surging again, especially U.S. junk debt tied to energy companies, which has experienced a record 16 percent rally so far in March. That's fueled a 4 percent gain in the broader high-yield market, the biggest monthly gain since 2011.