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Financial News: What happened last night?

Financial News:

What happened last night?

SPX drop on Thursday

A massive options trade may be the culprit for the S&P dump just before market close Thursday afternoon.

The trade at 11:00 a.m. was a huge collar options trade involving the sale of around 44,000 June calls and the purchase of an equal number of June put spreads, which would pay out if the S&P 500 fell more than 5% from its current level.

The trade also included the sale of around 24,800 calls tied to the S&P 500's 4,300 level, which were due to expire at the end of Thursday's trading session as a strategy to protect against any severe market moves during the trading day.

A collar is a type of options hedging strategy that combines puts and calls.

Photo: The S&P 500 Index (.SPX) fell 1.2% in the last hour of trading on 2022.03.31, marking the largest hourly drop for the index in more than three weeks.

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Content ID: 1648809458 Created Friday, April 01, 2022 10:37 AM UTC by Aaron Stipkovich, Updated Friday, April 01, 2022 1:14 PM UTC by Aaron Stipkovich.