S&P 500’s Slide Brings Huge Options Position Into Rare Focus

A huge options position expiring at the end of the month is giving some on Wall Street a new level to fuss over.

The JPMorgan Hedged Equity Fund’s (JHEQX) — which uses put options to shield against drops in the index — holds a long position in S&P 500 put options at 5,565 as part of a collar position that is rolled at the end of each quarter. The current collar — which also includes short positions in 4,700 puts and 6,165 calls — potentially adds to volatility, according to derivatives strategists, though is expected to prevent a deeper selloff. That was the case on Monday and Tuesday, when the S&P 500 briefly dipped below that level before bouncing back.