As the historical inverse relationship between stocks and bonds falters, market participants are deploying USO bull call spreads to hedge against simultaneous asset class declines.
Mentioned as a hedge using a bull call spread strategy, implying a positive outlook on oil.
The traditional diversification benefit between stocks and bonds is eroding as their correlation climbs to 0.35 in 2026. Investors are increasingly turning to alternative hedges, specifically utilizing bull call spreads on the USO ETF to mitigate portfolio risk during market drawdowns.
The correlation between the S&P 500 and long-term Treasurys has spiked to 0.35 in 2026, causing both asset classes to decline simultaneously during market sell-offs.