Wall Street Favors Vanilla Options Rather Than VIX to Hedge

Hedging is a hot topic again as Jerome Powell’s Jackson Hole speech stoked enthusiasm that the Federal Reserve will cut rates in September, sending stocks back up near record highs.

With signs of generally extended positioning within equities, investors are debating the most effective way to protect gains before Nvidia Corp. earnings, jobs and inflation data and the Fed rate decision.

Read more: Wall Street Gets the Rally Signals From Powell It Was Hoping For

“Powell came in more dovish than feared and markets have clearly responded positively,” said Chris Murphy, co-head of derivatives strategy at Susquehanna International ...