Hedge Funds Eye Exotic Options to Play Huge Cross-Asset Swings

The wild swings led by oil since the start of the Iran war have institutional investors turning to exotic hybrid options to trade cross-market gyrations.

Oil prices swung almost $36 a barrel on March 9, the biggest one-day range on record, triggering sharp intraday reversals in assets from stocks and bonds to gold and the dollar. Implied volatility measures spiked as traders sought cover from massive swings.

Read more: Long-Trusted Haven Trades Are Failing as Gold, Treasuries Fall

Turning to bonds and gold for protection from soaring crude prices hasn’t worked as stagflation concerns have gripped markets. A protracted shutdown ...