NEW YORK (Reuters) – As U.S. stock prices have marched to record highs, futures contracts for Wall Street’s “fear gauge” show some investors are buying insurance against market turbulence that could erupt if surprise glitches hit the U.S. rollout of COVID-19 vaccines.
This hedging can be seen in futures on the Cboe Volatility Index expiring in March and beyond, which are trading well above the index’s current levels.
Uncertainty over the rollout has also helped keep the “fear gauge” hovering above its long-term average near 20, even as the S&P 500, Dow Jones Industrial Average, Nasdaq and small-cap Russell 2000 have rallied to record highs this week.
Investors said they would watch how close President Joe Biden can come to his goal of administering 100 million doses of the vaccine in the first 100 days of his term. On Thursday, he signed executive orders aimed at expanding testing and vaccinations.
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