JPMorgan Fund's Quarterly Options Reset Could Spark Volatility on Sept 30

A $16B JPMorgan fund that resets options quarterly could cause volatility in stocks as it adjusts positions on Sept 30.
The fund holds S&P 500 stocks and options, so its rebalancing impacts trading volume and hedging activity.
The recent stock slide has brought S&P near levels where the fund's options may be triggered.
Market makers who sold the fund options must hedge by selling futures as the market nears strike prices.
Traders may avoid buying stocks until after the fund's position adjustment given the potential volatility.

reuters.com

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