Goldman is making a big call to clients to hedge for a market decline. Here's what it recommends

  • 📰 CNBC
  • ⏱ Reading Time:
  • 22 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 12%
  • Publisher: 72%

South Africa News News

South Africa South Africa Latest News,South Africa South Africa Headlines

This options trade on expected volatility could help protect a portfolio from a market downturn, according to Goldman Sachs.

Investors worried that the stock market is due for a reversal may be able to hedge their position without changing their exposure to equities, according to Goldman Sachs. Arun Prakash from Goldman's derivatives research team proposed an options trade focused on the Cboe Volatility Index , or "Vix," to hedge against a market selloff.

Generally speaking, a call option gives the holder the right to buy the underlying asset at the strike price, and serves as a bet that the asset will rise above the strike price. Since the VIX itself is not a security, options trade on the index are settled in cash. The calls recommended by Prakash would be easily "in the money" if the index just jumped to its historical average for April, according to Goldman.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 12. in ZA
 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

South Africa South Africa Latest News, South Africa South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Goldman Sachs/NYC offer funds for Minority Business developersThe city and Goldman Sachs say they will be offering a new $50 million line of credit to Minority Business Enterprise (MBE) developers.
Source: NYAmNews - 🏆 269. / 63 Read more »