The S&P (SPY) has not just dramatically outperformed the EAFE (EFA) over the last year,...

|By:, SA News Editor

The S&P (SPY) has not just dramatically outperformed the EAFE (EFA) over the last year, but EFA's volatility has risen to its highest level in relation to SPY since summer 2007. Since correlation of the two is high, options buyers should be favoring SPY. A fancier trade: Swapping EFA volatility (selling puts/calls) for SPY volatility (buying puts/calls).