JPMorgan's Options Trade and Stock Performance Amidst Banking Crisis.

JP Morgan's nearly $16 billion Hedged Equity Fund is expected to reset its options positions on Friday, which could add to equity volatility at the end of a gloomy quarter for stocks. The fund uses an options strategy that seeks to protect investors if the S&P 500 falls between 5% and 20%, while allowing them to take advantage of any market gains in the average range of 3.5-5.5%. Options dealers take the other side of the fund's options trades, and to minimize their own risk, they typically buy or sell stock futures, depending on the direction of the market's move. Such trading related to dealer hedging has the potential to influence the broader market, especially if done in size, as is the case for the JPM trade.