Massive S&P options trade may have roiled U.S. stocks on Thursday

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Traders are pointing to a massive quarterly options trade on Thursday they said was from a JPMorgan fund as one reason why the stock market took a nosedive late in the day, as options flows linked to the trade exacerbated market weakness.

Traders work on the floor of the New York Stock Exchange in New York City, U.S., March 30, 2022. REUTERS/Brendan McDermidNEW YORK, April 1 - Traders are pointing to a massive quarterly options trade on Thursday they said was from a JPMorgan

Markets have had a rollercoaster quarter due to Russia's invasion of Ukraine, volatile commodities prices and the U.S. Federal Reserve starting to hike interest rates. It was unclear what caused the initial late-afternoon market weakness on Thursday that triggered the cascade of stock futures selling.

Kochuba said that based on past trading patterns and details of investment strategies laid out in the fund's prospectus, the trade was initiated by the JPMorgan Hedged Equity Fund. Systematic traders, often hedge funds, take a rules-based approach in their investments and are often driven by fixed quarterly schedules rather than strong investment themes.

 

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