Technology stocks have been among the best performers in bull market rally, but have recently experienced wild swings that have shaken many investors. If volatile in this market segment continues, traders may look to bearish or inverse technology exchange traded funds to hedge further risks.
The Nasdaq-100 Index’s gauge of one-month implied volatility is exceeding the S&P 500’s by the most in over 13 years, signaling heightened fear among tech giants, Bloomberg reports.
Michael Purves, chief global strategist at Weeden & Co, warned that there is increasingly unwillingness to pay a high price for potential earnings growth of the high-flying tech giants that could face potentially massive regulatory scrutiny.
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That tumult “underscores our view that the regime shift to be concerned with right now is much more about the potential unraveling of a high price-to-earnings/low-market-beta FANG condition than it is about a rate scare or ugly tariff news flow,” Purves wrote in a note to clients.