The put/call ratio is at 1.19, which is huge because we haven’t gone to these levels in quite some time. I mean, the last time we were trading around these levels was the COVID-19 crash of 2020, so I don’t say this lightly.
If you turn your attention to the SPDR Dow Jones Industrial Average ETF Trust (NYSEArca: DIA), you’ll notice it’s sitting right at its previous lows and starting to bottom out. And if you look at its average true range, which measures volatility, you’ll see that it’s peaking out.
This tells me that the market’s downside pressure was too much too fast, which means there’s a great chance stocks will experience a big bounce.
The 2022 markets have been plagued with headwinds from supply chain disruptions and materials shortages in everything ranging from semiconductors and energy to baby formula…
And now a heatwave in India is forcing another market adjustment after its government banned wheat exports over the weekend.
Tuesday saw shares of top fertilizer stock Mosaic jump as high as 5.5% from Monday’s closing price, sparking a buying frenzy in the options chain!
Institutional traders swept up more than 5,500 contracts of the Sept. 16 expiration, $70 strike calls for more than $3.5 million in premium!
And that wasn’t the only ag name hitting the tape Tuesday…
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A Hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security. Investors and money managers use hedging practices to reduce and control their exposure to risk. In order to appropriately hedge in the investment world, one must use various instruments in a strategic fashion to offset the risk of adverse price movements in the market. For example, if someone is holding a large stock position and earnings are coming up, they might enter an out-of-the-money put option in case the stock takes a big dive following the report.
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