Giant S&P 500 Options Trade Made to Guard Against 20% Swoon

(Bloomberg) — A trader just established a massive hedging position via options to protect a portfolio of stocks in the event that the S&P 500’s losses snowball toward 20% during the fourth quarter.

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The trader Thursday morning bought 45,300 put-spread collars — options cocktails that combine various strike prices in a single strategy — on the S&P 500 for $94 million. The order involved selling calls with a strike price at 4,505 while buying puts exercising at 4,135…

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