Hedging Demand Perks up Even as Volatility Craters

(Reuters) Soaring U.S. share prices and plunging market volatility measures may paint a picture of optimism, but there are signs in the equity options market that investors have started to question how long this goldilocks period can last. The post-election share rally has quieted the CBOE Volatility Index .VIX, the most the widely followed barometer of expected near-term stock market gyrations. Its record lows highlight anemic hedging demand at the broad index level.

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