JPMorgan Says Plunging U.S. Options Signal Simply Shows Caution
- S&P 500 put/call open interest ratio near multiyear lows
- Increased bullish options demand argues against complacency
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A key gauge of S&P 500 Index options activity has tumbled to multiyear lows, which some might see as a signal investors are underhedged. But JPMorgan Chase & Co. doesn’t think so.
The plunge in the S&P 500 put/call open interest ratio, which measures the amount of bullish versus bearish options outstanding, is more about caution because it’s accompanied by sharp deleveraging and is explained mostly by increased demand for calls, JPMorgan strategists Bram Kaplan and Marko Kolanovic wrote in a note Monday.