Only four months since 1950 has the S&P 500 fallen by at least 7% only to close higher on the month. That’s exactly what happened in October – a record month for major stock indices and options volume.
This week’s market action demonstrated the ability of some investors to endure pain. Others were pushed out of their equities and other elements of their portfolios by margin calls. After five days of losses, equity markets recovered substantially from Wednesday’s low.
With gold set to post negative year-over-year returns for the first time in 13 years, many traders are positioning themselves for an uncertain 2014. Amidst such volatility a trader must be very conscious of risk, and options are a vehicle to do that.
U.S. stocks fluctuated, after the Standard & Poor’s 500 Index had its biggest loss in a month, as investors weighed whether improving economic data will prompt the Federal Reserve to cut stimulus next week.