Investors seen trading risk reversals on HY, big cap ETFs

By Daniel O'Leary
04 Aug 2014

Investors have been trading short-dated risk reversals on high yield bond exchange-traded funds or big cap equity ETFs in a bid to hedge further declines in the US stock market.

Risk reversals involve selling a call and buying a put option. They protect against declines, while also capping upside exposure.

An equity trader in New York told GlobalCapital investors are trading the riskies on the Utilities Select Sector SPDR ETF and the iShares iBoxx $ High Yield Corporate ...

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