The cost of protecting against swings in euro-zone stocks jumped 52 percent from the Euro Stoxx 50 Index?s almost six-year high in June through Aug. 8. The gauge of regional equities tumbled 9.3 percent during that time, with Germany?s DAX Index entering a correction. Swiss (SMI) and U.K. equities each declined less than 5.5 percent from their peaks, making options on the two national benchmark gauges the cheapest in more than a year relative to their neighbors in the euro area.
Eight of the 10 most-owned options on the Euro Stoxx 50 were bearish at the end of last week, data compiled by Bloomberg show. Contracts betting the index will decline 10 percent to 2,700 by Dec. 19 had the biggest ownership.
The VStoxx Index, which measures the cost of expected volatility on the Euro Stoxx 50, climbed 2.1 percent to 21.24 on Aug. 8, its highest level since March 17. It declined 4.1 percent to 20.36 at 11:46 a.m. in London.
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