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S&P 500 Slid Toward Key 3,900 Level But Held Its Ground Thanks to Options

  • Traders monetize or roll out puts ahead of Friday’s expiry
  • That forces market makers to buy stocks to stay market neutral
Traders on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, June 27, 2022. Money managers betting on a sustained global rebound will be left sorely disappointed in the second half of this crushing year as a protracted bear market looms, even if inflation cools.
Traders on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, June 27, 2022. Money managers betting on a sustained global rebound will be left sorely disappointed in the second half of this crushing year as a protracted bear market looms, even if inflation cools.Photographer: Michael Nagle/Bloomberg
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A chart line where thousands of options trades are clustered put a tenuous floor under the S&P 500 despite being tested repeatedly.

While the level -- 3,900 on the benchmark index -- was breached for most of the last hour of trading, a last-minute jump deposited the gauge about a point above it. Thursday was still a bruising day for bulls, with stocks losing more than 1% for the second drop in three days.