Options whale fears in US stocks

The stock and bond markets are worried about an ‘option whale’ on the horizon. While the stock and bond markets continue to fall due to the Fed’s rhetoric of “higher and longer-term interest rates”, the stocks are now worried about an ‘option whale’. Tens of thousands of put contracts of JPMorgan’s stock fund expire on Friday. The strike price of these contracts held by the $16 billion JPMorgan Hedged Equity Fund is not far below the current level of the S&P 500. The counterparties to these contracts want to hedge themselves by buying short positions against the danger of holding onto long positions if the strike price is seen. There is concern that additional fluctuations will occur in the S&P 500 index as a result of this situation called delta hedging. The S&P 500 closed Wednesday flat at 4,274.5 points. The JPMorgan stock fund’s sell order is at 4,210. This will be a level that market watchers will be watching this week as it will trigger many options orders.