Option Traders Fear a Crash

In the stock pits, traders are bullish but not so in the options arena:

Investors are paying the most ever to protect against a drop in the Standard & Poor’s 500 Index, data compiled by Morgan Stanley show. The gap between the price of so-called put options on the benchmark for U.S. equity and the cost to wager on further gains has averaged about 8 percentage points since August. That’s more than the previous high in July 2001, before the index dropped 34 percent and fell to the lowest this decade.

Posted by on October 8th, 2007 at 12:14 pm


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