Stock investors are hedged to the teeth, anticipating a looming crisis from fraught U.S.-China trade talks, recession risk or political bombs in Washington. That’s making it dirt cheap to bet on the bull market defying the odds.

Traders in S&P 500 Index options have rarely been this bearishly positioned, with nearly 2.5 puts outstanding for every bullish call. The cost of hedging, or skew, has spiked to one-year highs across multiple equity benchmarks and options tenors, according to an Oct. 7 note from Credit Suisse Group AG.

But for investors optimistic there’s a way out of the tangled trade mess, bullish on the U.S. economy or sanguine about impeachment risk, opportunity awaits.

“Given the defensive positioning right now, we think the pain trade is to the upside,” Mandy Xu, chief equity derivatives strategist at Credit Suisse, wrote. “If we get a positive turn of events -- whether it’s on trade, politics, or economics -- the upside rally could catch investors off guard.”

Stocks were pummeled Tuesday after Beijing said it strongly opposed a U.S. decision to blacklist some of its technology firms and Bloomberg reported the Trump administration is moving ahead with discussions about restricting capital flows. For many, it was the kind of day that justified skepticism about high-level talks in Washington to end a protectionist showdown with China.

“There’s a bit of a fool-me-once,” Xu said in a Bloomberg TV interview. “We’re now onto the 13th round of trade talks, and investors have significantly dampened their expectations.”

But with a mercurial U.S. president and talk of a mini-deal, there’s always the possibility that the bearish bets are overextended. S&P 500 futures rallied on Wednesday on news that China is still open to agreeing a partial trade deal with the U.S.

“Everyone’s so focused on the left tail -- markets going down -- no one’s really concerned about the right tail,” Xu said in the interview. “If you are concerned about the right tail, looking at those upside calls right now, it’s a good trade.”

Trade isn’t the only risk out there, with President Donald Trump vowing to stonewall the impeachment probe by House Democrats and a recent string of gloomy data pointing up the fragility of the global economy.

Still, not every market metric shows outright pessimism. A basket of trade-sensitive stocks outperformed the S&P 500 between mid-August and mid-September, and remains above the lows seen in May and early August, both periods when the trade war escalated.

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