From Barrons: Investors are quietly building defensive
options positions as the stock market hovers around all-time highs. The
"greed-in" and "risk-on" trade still dominates, but a
nascent change is occurring as key market risks, particularly the threat of
sequestration, loom menacingly ahead.
With the Standard & Poor's 500 inhaling thin oxygen
around 1500, investors are bearishly positioning in financial and small-company
stocks that have reacted poorly to Europe's economic and political unrest and
the U.S. economy's malaise. Investors are buying puts, often in large size, on
the Select Sector SPDR-Financial (XLF) and the iShares Russell 2000 Index
(IWM). If stocks slide, they could force the parties on the other side to buy
these exchange-traded funds at prices higher than those they'd be trading at.
….True, the defensive trading is thus far isolated and
controlled, but it has occurred in such large size as to cause some investors
to wonder if the stock market is too far ahead of itself, given what might be
waiting at month's end….
Learn more at http://online.barrons.com/article/SB50001424052748704372504578284083044727890.html?mod=BOL_hpp_dc#articleTabs_article%3D1
No comments:
Post a Comment