Description:Â The biggest sell-off in the Standard & Poorâ€™s 500 Index since March is rewarding options traders who bet on a surge in volatility with gains of 75 percent.
Questions for discussion:
- What sort of risk is involved with these instruments?
- Who would be interested in them?
- Do you agree with the comment that â€œPeople are betting on higher levels of volatility in the short term.â€ Explain your answer.