Reuters- Shocked by credit market turmoil, investors are now seeking protection on their credit protection.
In the last few weeks, Europe’s credit indexes — widely traded ways of betting on the creditworthiness of the continent’s big companies — have registered some of their sharpest rises and falls since they began four years ago.
That has spurred demand for credit options — trades that hedge against further violent moves or, conversely, look to profit from them.
"We’re seeing quite a bit of interest in trading options these days, and that’s mainly because of the high volatility," said Soren Willemann, credit strategist at Barclays Capital.
"Credit options is still a fairly young market. In the past year or so, it has gained a lot of traction," he added.
