Option traders have once again returned to their long positions in the stocks after Trump's commercial policy, Rex Tillerson's dismissal, and Gary Cohn's departure have sent Dow Jones to the bottom since the beginning of the month. As expected, the biggest losers were international companies such as Boeing and the country's technology giants Apple and Alphabet. Although volatility in the markets has fallen in recent days, the spread between ETFs tracking Dow and SP's 3-month volatility has risen to levels prior to the global financial crisis in 2008. While Dow and SP500 managed to recover to some extent, the derivative activity among option traders suggests that the hedging of long positions in US stocks is still in vogue.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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