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George Ma
in
Stocks
June 1 08:49

JPMorgan advises to hedge equity market downside risks in July-August

That's when tensions between the U.S. and China may reach a boiling point, JPMorgan predicts.
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The recent deterioration of relations between the USA and China can reach a boiling point in July-August, therefore investors should hedge risks of decrease in the share market during this period, write strategists of JPMorgan. It is possible to do it either by selling call options against a long position in stocks, or by buying put options and bearish spreads.
This week bank experts have lowered a degree of optimism on the U.S. stock market, saying that the recent deterioration in relations between Washington and Beijing is a sign of politicization of the Covid-19 pandemic. This conflict may slow down the fragile economic recovery as the world is gradually emerging from quarantine.
As for the companies that receive 15% or more of their revenue from China, the bank advises to buy put options and bear spreads directly.