After Bernanke's Testimony: Hedging Precious Metal ETFs

"Once upon a time, the Federal Reserve Chairman’s Semiannual testimony in fulfillment of the Full Employment and Balanced Growth Act (aka “Humphrey Hawkins”) was a marquee event for markets," says Vincent Reinhart, Morgan Stanley's Chief U.S. Economist and a former Federal Reserve insider.

By David Pinsen:On Wednesday, a day when the Nasdaq Composite declined nearly 1%, several Nasdaq stocks rose on unusual volume -- six of them rose on increases in their daily volumes of more than 100%. The table below shows the costs, as of Wednesday's close, of hedging those six stocks against greater-than-23% declines over the next several months, using optimal puts. Comparisons

David Pinsen submits:The table below shows the costs, as of Thursday's close, for hedging 7 of 10 stocks that advanced on unusually heavy volume against greater-than-20% declines over the next several months using optimal puts. Comparisons

David Pinsen submits:Although Friday marked the sixth weekly decline in a row for major stock indexes, a handful of optionable stocks rose on unusually heavy volume that day. The table below shows the costs, as of Friday's close, of hedging ten stocks that advanced on unusually heavy volume against greater-than-20% declines over the next several months, using the optimal puts for that. Comparisons

David Pinsen submits:At the end of the sixth straight down week for stocks, the Chicago Board Options Exchange Market Volatility Index (VIX) ticked up 6.13%. The table below shows the costs, as of Friday's close, of hedging the most actively-traded (by share volume) New York Stock Exchange stocks against greater-than-20% declines over the next several months, using the optimal puts for that. Comparisons

David Pinsen submits:The table below shows the costs, as of Friday's close, of hedging the most actively-traded (by dollar volume) New York Stock Exchange stocks against greater-than-20% declines over the next several months, using the optimal puts for that. Comparisons

David Pinsen submits:The table below shows the costs as of Wednesday's close of hedging the most actively-traded Nasdaq stocks against greater-than-20% declines over the next several months, using the optimal puts for that. Comparisons

David Pinsen submits:On a day when the major indexes rose, the Chicago Board Options Exchange Market Volatility Index (VIX) dropped 2.56% Monday, closing at 20.54. The table below shows the costs, as of Monday's close, of hedging each Dow component, and the Dow-tracking ETF (DIA), against greater-than-20% declines over the next several months, using the optimal puts to do so.