Short-Dated Puts Eyed Across Indices To Hedge Against Virus Progression

Investors should consider buying short-dated puts after the recent large spot rally across global equity indices, according to UBS strategists. A number of global equity indices rallied by up to 20% from the March lows. At the same time, there have been huge drops in both at-the-money and fixed-strike vols — down by 30 to 40 vol points for Euro Stoxx at the front, said Kieran Diamond, equity derivatives strategist at UBS in London.  “We see value in short-dated hedges from here as a way to help books through the critical next fortnight of data around virus progression,” he said.