Credit-Hedging Surge Sends Put Options on HYG and LQD to Record
- Put open interest on those ETFs surges as yields push higher
- Fears growing that rate hikes might come at expense of growth
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Bearish bond investors are rushing for protection, fueling a surge in options activity in two of the biggest corporate-bond ETFs.
Open interest for put contracts is close to all-time highs for both the $34 billion iShares iBoxx $ Investment Grade Corporate Bond exchange-traded fund (ticker LQD) and the $17 billion iShares iBoxx High Yield Corporate Bond ETF (HYG), according to data compiled by Bloomberg. Both funds have posted a barrage of outflows in recent days.