Crash or Soar? Traders Are Preparing for Stock Market Extremes
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Investors who just booked profits from one of the strongest first quarters for the S&P 500 Index in decades are preparing for what comes next — whether that’s stocks climbing higher or crashing back to earth.
With the stock market sitting at an all-time high as the second quarter begins, the tells for what traders are thinking lie in the options market. Demand for put options that pay off if there’s a minor correction is around the lowest in years. Meanwhile, traders are quietly picking up tail-risk hedges: instruments that do little if there’s a slight downdraft but offer protection if stocks swing wildly.
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This article was originally published by a www.bloomberg.com . Read the Original article here. .