Options May Be Cheap Ahead of a Rally

Greg Calderon from Bloomberg News discusses the current market volatility, focusing on the VIX rally and futures contracts. Insights from Goldman Sachs and JP Morgan suggest a potential 5% market rebound, with options being relatively cheap. The discussion also covers market predictions, hedging strategies, and the outlook for Q4, concluding with final thoughts on market insights.

What was the percentage increase in the VIX on the day of the recent sell-off?

• 10%

• 20%

• 30%

• 40%

What strategy did Goldman Sachs recommend for S&P 500 stocks?

• Buying a 5% out of the money call option

• Selling a 5% out of the money call option

• Buying a 5% in the money put option

• Selling a 5% in the money put option

What probability did Goldman Sachs assign to a 5% market rally?

• 10%

• 15%

• 26%

• 30%

According to the transcript, what is the typical seasonal performance of Q4?

• Weak quarter

• Neutral quarter

• Strong quarter

• Unpredictable quarter

What is one suggested method to hedge against the predicted market movements?

• Selling a put option

• Buying a put option

• Selling a call option

• Buying a call option