Greece Makes It Expensive to Hedge European Stocks
How Nervous Is the World Over Greek Bailout Talks?
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While U.S. stock traders breathed a sigh of relief after Friday’s selloff, their counterparts in Europe are still on edge as drama unfolds in Greece.
A gauge of anxiety in Euro Stoxx 50 options jumped to the highest level in more than 12 years relative to a similar volatility measure in U.S. equity derivatives. The divergence reflects rising costs for hedges to protect gains in Europe even as its benchmark equity gauge sits about the same distance from a record as the Standard & Poor’s 500 Index.