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Who's buying all those S&P 500 put options?

Posted on August 2, 2010 - 7:46pm

The following article has been featured on MarketWatch.com.

Traders are paying huge premiums for Standard & Poor's 500 Index options expiring in September, October and November.

It is not unusual to see traders worry about what might happen to the market in the typically nasty September-October time frame, but this year, they're really getting carried away.

We can see, in mathematical terms, how much they're paying by looking at the implied volatilities of the S&P 500 (SPX 1,181, -4.59, -0.39%) options expiring in various months. These data show up in the prices of the CBOE Volatility Index (VIX 21.19, +0.97, +4.80%) futures.

To continue reading the story, visit: http://www.marketwatch.com/story/whos-buying-all-those-sp-500-put-options-2010-08-02

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