In fact, traders are using high-yield ETFs to make bearish bets against junk bonds in the options market. [High-Yield ETFs Suffer Outflows Amid Record Bearish Bets]
Also, while the CBOE Volatility Index has been relatively flat despite fears over the U.S. fiscal cliff and European debt, implied volatility in high-yield bond ETFs has surged. [High-Yield Bond ETF Implied Volatility Skyrockets]
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Full disclosure: Tom Lydon’s clients own LQD, HYG and JNK.