UBS: "Endgame" Stock Hedging Strategy On Both Sides Of The Market

With volatility predicted ahead, UBS recommends a particular stock hedging strategy that collects and pays option premium.

It was late in 2015 when UBS assumed as fact that the current bull market was entering into “late innings, given the surging M&A volumes, cyclically higher volatility and an imminent start to a Fed hiking regime. This house view was recently re-enforced in an April 29 report “US Equities: Endgame Approaching.” With a volatile market thesis ahead, what should investors do? Writing a derivatives strategy report, the same authors that penned the near-term bearish report on equities also instruct investors on one stock hedging method that has exposure on both sides of a...