Gunjan Banerji

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560 appearances 12 recordings 1 series first heard Apr 2018 last heard Nov 2024

Gunjan Banerji’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Options Traders Are Preparing for a Market Decline · 19 Dec 2019 podcast

presidential election, and especially that nominee's stances toward business.

So what we're seeing is that the cost of such protection, the cost of these hedges,

in the options market is increasing.

So that tells us that there's more demand for these bearish options that would protect investors from potential losses in their portfolio.

And options traders closely watch a measure that gauges, you know, how expensive are these bearish options relative to the bullish options.

And the cost of bearish options relative to bullish options is elevated at the moment.

So the Wall Street Journal reported that Bridgewater, one of the biggest hedge funds in the world, has also put on a very large options trade that would profit if the S&P 500 fell by March.

You know, there hasn't been a definitive trend, but I've definitely been hearing more from investors lately that there seems to be more demand for hedges in the options market lately.

And that's surprising to some investors because, again, they see the S&P 500 at a record high.

They see stocks soaring.

the options market is sending a more cautious signal.

And there you have investors saying, well, you know, the U.S.

and China, they reached a preliminary trade pact, but what if it doesn't last?

Or we've had these developments on Brexit, but again, what if they don't last?

So the options market is just a little bit more cautious about some of these recent optimistic developments than the stock market has been.

Some people have definitely also turned to bullish options that would profit if stocks continue to rise.

And that's one thing that options traders need to keep in mind because these types of portfolio hedges, yes, they can protect their portfolios from a downturn, but they cost money.

They're not free.

And what we've seen in recent years is often traders would pay up for these types of hedges only to lose money from them.

Thanks for having me.

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