Traders Eye Longer-Term Options to Hedge Post-Tariff Shock Rally

As April’s volatility storm fades into memory, traders are left balancing calmer markets and the ever-present risk of a fresh round of headline shocks.

A consensus had developed among derivatives strategists heading into 2025: While regular option selling by income ETFs and other funds would keep volatility broadly in check, there would be more short-term shocks like Aug. 5. Following the April 2 tariff selloff that sent the Cboe Volatility Index spiking before a reversal, that view looks prescient so far.

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The question for investors of how best ...