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Stock impact report

Traders snap up high-yield bond ETF put options as credit hedge [BNN Bloomberg (Canada)]

Charles Schwab Corporation (The) (SCHW) 
Last charles schwab corporation (the) earnings: 4/15 08:45 am Check Earnings Report
US:NYSE Investor Relations: aboutschwab.com/investor-relations
Company Research Source: BNN Bloomberg
A series of put option trades were booked Thursday in the iShares iBoxx High Yield Corporate Bond ETF (HYG) that would rise in value if the junk bond market deteriorates. The ETF's implied volatility and put skew rose to multi-month highs as investors paid up for bearish bets. Alex Coffey, a senior trading strategist at The Charles Schwab Corporation, said buying puts on the HYG is a “recessionary” and “negative growth” trade. The credit market has been slow to incorporate the impact of tariffs on bond defaults, according to Coffey. “One of the interesting features of the current market is how much tighter credit spreads have been than you would expect.” In one of the trades, an investor spent $3.6 million on put spreads allowing them to sell ten million shares of ETF at $76 by mid-May, while capping protection at $72. Another 130,000 May $75 puts traded, with at least 100,000 of them bought, according to market participants. The total number of puts traded reached 1.56 milli Show less Read more
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