12/11

JEPI Flat as Investors Turn to Hedging Amid S&P 500 Uncertainty

The JPMorgan Equity Premium Income ETF (JEPI) is experiencing positive movement as investors increasingly turn to hedging strategies amid potential risks in the S&P 500. The cost of protection against market pullbacks has reached its lowest level since before the pandemic, indicating a shift in sentiment. This trend is driven by a decrease in aggregate buyside positioning in US equity futures, which had previously reached an all-time high. The uncertainty surrounding the Federal Reserve's interest-rate cut trajectory further contributes to a cautious outlook, prompting traders to brace for potential volatility. The appeal of hedging is amplified by the historically low cost of S&P 500 one-month 25-delta put implied volatility, encouraging investors to consider put options to mitigate downside risks.

The S&P 500 Index, a key benchmark for JEPI, is trading at 6,087.81, reflecting a 0.88% increase. This rise in the S&P 500 supports the upward movement of JEPI, which is currently priced at $59.72, up 0.13% as of 12:16 PM ET on December 11th.