HYG ETF Draws 190,000 Puts as $1.3 Million Bet Targets Further Credit Weakness
Updated
Updated · CNBC · Jun 18
HYG ETF Draws 190,000 Puts as $1.3 Million Bet Targets Further Credit Weakness
3 articles · Updated · CNBC · Jun 18
Summary
190,000 HYG puts traded Thursday—about five times call volume—with one investor spending $1.3 million on 20,000 Jan. 27 75-strike puts.
The bearish flow hit as traders reassessed credit risk after new Fed Chair Kevin Warsh's first meeting and as crude oil slid to its lowest level since March.
Energy exposure may be amplifying concern: more than 11% of HYG is invested in the sector, which is vulnerable to the oil sell-off following the U.S.-Iran peace deal.
The busiest contract was the Aug. 21 77-strike put, where 40,000 contracts changed hands; at 39 cents, buyers need HYG to fall another 4% to break even.