Options Traders Target Emerging Markets as U.S.-China Talks Sour
- What started out as a calm day turned to alarm over trade
- Investors are piling into protection from a collapse in talks
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Casting aside the relative calm seen earlier this the week, options traders are all of a sudden catching on to the risk that emerging markets will be in the crosshairs if a trade war escalates -- and other asset classes would be collateral damage.
The hours that followed the opening of U.S. markets Thursday saw a rush for protection in segments of the derivatives market most sensitive to the U.S.-China trade tiff. Those assets had been well-behaved in the days prior amid bets that a deal would eventually get done despite the heated rhetoric from U.S. negotiators and President Donald Trump.