Options activity hints US stock market has not reached bottom: Barclays

NEW YORK, Sept 28 (Reuters): Options trading activity does not yet hint at a bottom in US stocks, Barclays derivatives strategists said on Tuesday, rebutting speculation among some investors that a record surge in put option trading volumes suggested the market may be nearing a reversal.
With the S&P 500 marking a fresh bear market low on Tuesday, down 24% for the year, traders and investors are searching for clues as to when the market may bottom out.
Trading in put contracts - typically used to protect against market losses - has surged, with a record 33.93 million put contracts changing hands on Friday alone. That left traders who view extreme put-option activity as a sign of investor pessimism peaking wondering if the selloff is done.
That's not the case, according to Barclays.
"Contrary to popular belief, equity investors did not hastily pile into protection buying," Barclays equity derivatives strategist Stefano Pascale said in a note on Tuesday.