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Since we published the first ASX Equity Derivatives blog on 5 April 2023 the ASX/S&P 200 has rebounded to higher levels. As of mid-April the uptrend may be slowing and this has brought out a few hedgers in the ASX/S&P 200 option market. The majority of large hedging transactions in March involved put purchases while we are seeing a bit more creativity with institutions using spreads to lower the cost of protection. This creativity is a function of managers looking for specific protection at a lower cost than purchasing a put. The chart below shows the daily performance of the ASX/S&P 200 through 19 April with the time frame when the trades to be discussed highlighted.
Published in May . Click here to view the original report on the ASX website.