Hedges Across Assets Are Too Expensive, Morgan Stanley Says
- Options imply broad range of outcomes, strategists say
- Morgan Stanley suggests positioning for a peak in volatility
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Long volatility is too expensive as hedging strategy and investors should position for a peak in price swings in some assets, according to Morgan Stanley.
Volatility markets tend to top out before spot markets find their bottom, even if only by a few days, and it’s worth allocating for such a peak now with bets on the Canadian dollar and credit markets, strategists led by Phanikiran Naraparaju wrote in a note Wednesday.