Demand for downside puts keeps skew high

The eurozone sovereign debt crisis caused volatility and skew to rocket earlier this year, burning dealers with short positions. Since then, traders have been reluctant to enter the fray, leaving markets in a state of dislocation. By Mark Pengelly


Equity derivatives desks experienced a white-knuckle ride in the second quarter of this year, as the European sovereign debt crisis caused volatility to soar. Today, many market parameters remain stretched, but there are few participants able to take advantage of the dislocation. In fact, dealers say liquidity in volatility products has diminished globally, thanks to a confluence of factors including market uncertainty, regulatory change and a lack of hedge fund activity. Some bankers even point

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What gold's rise means for rates, equities

It has been several years since we have seen volatility in gold. An increase in gold volatility can typically be associated with a change in sentiment and investor behavior. The precious metal has surged this year on increased demand for safe haven…

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