Bulls Nursing Wounds After Rout Eye Options Market For Solace
- OTM S&P puts buy fewer calls than three months ago: RBC
- Rising tech skew masks concern about rotation into value
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Stocks are selling off, dragging the S&P 500 down more than 5% from its all-time high set early last month, but the options market may be signaling that the rout is nearing an end.
To wit: Selling one S&P 500 put contract that’s 10% out of the money now buys fewer equivalent call options than it did three months ago. The observation by RBC Capital Markets is no guarantee that the worst of the rout is over. But it could be a sign that some options traders think so.