ETF options: the market’s latest credit hedge

Investors look to derivatives on fixed income exchange-traded funds to manage credit risk exposure


Investors have added a new weapon to their armoury in their efforts to combat wild swings in credit risk: options on fixed income exchange-traded funds.

Volumes in the product have grown in recent months, data from Bloomberg shows, after a spike in usage last March in the teeth of the coronavirus crisis when credit risk exposure soared.

Dave Kovtun, from the options institutional sales and trading team at Jane Street, a quant trading firm and liquidity provider, says the product is attracting

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