Record Options Trading Slows as Hedge Funds Fold, Prices Surge
U.S. options trading slowed this month from a record pace after hedge funds collapsed and the biggest market swings since 1929 made equity derivatives too expensive to be used as insurance against stock losses.
About 12.5 million contracts linked to shares changed hands each day in November on average, according to data compiled by Bloomberg. That’s 23 percent less than in October, the worst month for the Standard & Poor’s 500 Index since 1987, and 13 percent below the 2008 average, according to Options Clearing Corp., which processes all exchange-listed U.S. options.
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