Wall Street Advises Cheap Hedges as Market Volatility Looms

Wall Street firms, including Goldman Sachs, Citadel Securities, and JPMorgan Chase, are urging clients to secure inexpensive hedges as U.S. stocks hover NEAR record highs. The S&P 500 has surged 28% since April 8, while the VIX, Wall Street’s fear gauge, sits at its lowest level since February. This paradoxical calm has trading desks flagging a rare opportunity to buy downside protection before potential shocks.

Goldman’s trading team noted, 'If you are nervous, the market is making it very easy to rent hedges.' The advice comes ahead of critical events: the Federal Reserve’s interest rate decision on July 30, President Trump’s August 1 tariff deadline, unresolved U.S. trade deals with Mexico and Canada, and the looming July jobs report. Any of these could disrupt the current rally.

BofA Securities strategist John Tully echoed the sentiment, recommending short-dated put options to capitalize on cheap volatility. The push for hedges underscores growing unease beneath the market’s seemingly placid surface.