Preparing for Tech's Next Swoon

Options investors are bracing for more volatility, based on the difference between implied volatility-what investors expectand realized volatility-or what has happened in the market already-on the $21 billion Technology Select Sector SPDR exchange-traded fund (XLK). An options measure dubbed skew-wh...

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Bibliographic Details
Published in:Barron's 2018-07, Vol.98 (27), p.M9-M9
Main Author: Banerji, Gunjan
Format: Article
Language:English
Subjects:
Advisors
Investments
Put & call options
Social networks
Stocks
Volatility
Online Access:Get full text
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Summary:Options investors are bracing for more volatility, based on the difference between implied volatility-what investors expectand realized volatility-or what has happened in the market already-on the $21 billion Technology Select Sector SPDR exchange-traded fund (XLK). An options measure dubbed skew-which gauges the relative cost to protect against stock declines-is higher for tech than for any other sector, Trade Alert data show. Selling one put option helps finance the purchase of the other one, but also caps an investor's gains if the ETF falls far below the $155 mark.
ISSN:1077-8039