Writes:
Options traders are less pessimistic than equity investors about what will happen in developing countries as the U.S. Federal Reserve ends stimulus.
The cost of hedging against swings in an exchange-traded fund tracking the MSCI Emerging Markets Index is near a 13-month low compared with similar bets on the Standard & Poor?s 500 Index, according to data compiled by Bloomberg. Hedging prices fell even as the developing-nation gauge slumped 5.3 percent since Sept. 3 and clients pulled more than $830 million from the iShares MSCI Emerging Markets ETF last week.
Amid concern tighter monetary policy will squeeze out capital, options traders are looking beyond stimulus and focusing on economic prospects. A new government in India has promised growth-oriented policies, while signs are increasing that China?s economy will accelerate, according to Crossbridge Capital?s Manish Singh.
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