Cost of Treasury Options Hedges Surges to March Highs on Oil Spike
· Business · Bloomberg, LiveMint
The cost of options hedges against further gains in US government bonds surged to its highest level since March on Thursday. Investors rushed to buy downside protection in Treasuries following a sharp spike in crude oil prices. Market participants sought the relative safety of government bonds amid growing economic uncertainty. The rising hedging costs reflect heightened volatility and shifting sentiment across fixed-income markets. Traders continue to rebalance portfolios as energy markets pressure broader asset classes.
Why it matters
Fixed-income investors face significantly higher costs to protect portfolios against Treasury volatility following the oil price shock.
Read the original report — Bloomberg
Join us on Telegram
Breaking news the moment it lands. At 10,000 members we ship the Android app.