Are zero-day options powering the sharemarket rally?
Wall Street is experiencing record volumes of very short-term options being traded as speculators discover a new way to try to profit from market moves.
There’s no shortage of theories being advanced to explain the extraordinary “dash for trash” rally in the US sharemarket, which has had the tech-heavy Nasdaq shrugging off the unimpressive earnings reports from big tech firms to climb 10.6 per cent so far this year.
Some analysts believe the risk-on rally reflects growing optimism that US inflation is now cooling, which suggests that the Federal Reserve could be close to the end of its tightening cycle.
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Jill Margo was a senior writer at The Australian Financial Review.
