2024-06-24 23:17:15 +0300
Market Is Shredding All the Time-Tested Ways to Chart Its Course
Bloomberg
By Lu WangOptions insurance. Hedging with Treasuries. Using sentiment to pick a bottom. The things that have lessened the pain of past equity selloffs are coming up short this time around.
Case in point this week, with its forceful pivot from multimonth lows. Sudden relief rallies have become the bane of would-be hedgers, who are paying dearly for bearish options in 2022 that often fail to deliver gains. A straightforward protection strategy of owning 5% out-of-the-money puts on the S&P 500 has lost almost as much as the index itself this year, thanks to the contour of the decline.
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