Traders Pay Through the Nose to Bet the S&P 500 Will Climb
- Measure known as skew hits record low, indicating bullishness
- Average put-to-call ratio is near the lowest since last March
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If you want to bet that the S&P 500 will march even higher, be prepared to fork out a sizable sum. A record number of investors are happily paying up.
As U.S. stocks trade at all-time highs, the price tag on bearish options has dropped to a trough relative to bullish contracts. The spread between the price of one-month, 25-delta puts and calls for the S&P 500 is roughly two standard deviations below its five-year mean, data compiled by Bloomberg show. It’s an indication of the greed -- or lack of fear -- in the market suppressing the Cboe’s volatility gauge.