​Daily Bulletin: Thursday Dec. 18

The S&P 500 and the Dow Jones Industrial Average both saw continued rallies today as the market seemed to digest news on Wednesday that the U.S. Federal Reserve’s rate rise would be dependent on consistent data sets. The stabilization in oil prices has also helped the broad rally in U.S. stocks. Interesting call option flow was seen on SPY today targeting a variety of maturities and strikes. While investors are happy with U.S. stocks, the same cannot be said with emerging markets. Put spread trading on EEM has been a developing theme for the last three weeks, with heavy traffic in the strategy seen again today. In Europe, A recent deluge in investment grade supply combined with a surge in volatility driven by declining oil prices has opened the opportunity for investors to enter a long risk CDX IG/Short SPX strategy. We also take a look at pension and endowment hedging, and how some “less nimble” funds are underutilizing the VIX.