Anxiety surrounding U.S. President Donald Trump’s tariff day midweek has sharply lifted the price of portfolio protection for investors, but there are pockets of the market where hedging remains relatively cheap and offer trading opportunities, according to JPMorgan.

Concerns over tariffs have contributed to the S&P 500 falling 8.7% from its record closing high on February 19 and caused increasingly choppy trading. The CBOE VIX index, an option-derived measure of expected S&P 500 volatility, sits above 22, compared to its long-term average of 19.5.

The JPMorgan team said that implied volatility in the S&P 500’s short-term options is particularly elevated in the next few days but then falls swiftly.

“The S&P 500 term structure [the implied volatility curve] is inverted and exhibits a kink for the April 2nd announcement, implying a 1.6% move [up or down] on the S&P 500 for this event,” they said.

JPMorgan calculates that the option-implied moves for the Nasdaq is higher at 1.8% and higher still for the Russell 2000 at 2.1%. Seven to 10-year Treasurys may move 0.6%, equivalent to a 9 basis point yield change, while Treasurys of 20-years or more may move 0.9% for a 5 basis point yield change.

However, the bank points out that while implied moves across equity indices and U.S. government bonds are generally higher than what these assets have realized on recent tariff escalation announcement days, implied event moves appear relatively cheap for credit and gold.

This provides a trading opportunity, they say. With regard to gold the JPMorgan team remain bullish in the longer-term with the tariff uncertainty among one of the important drivers.

“But, given the strong bull run and large buying flows recently, we could see profit taking drive near-term downside in gold prices in case the April 2nd tariff announcement proves benign,” they said.

So they suggest buying a short-dated option straddle on gold. A straddle is when a trader simultaneously buys a put option (the right to sell an asset) and a call option (the right to buy) for an underlying security with the same strike price (the chosen asset price level) and same expiration date.

This strategy is meant to exploit a big movement of an asset when the trader is unsure in which direction it will go. Opening a straddle when the implied volatility of an option may be underpricing any possible reaction provides the chance of a better return. The higher the implied volatility of an option is priced going into an event, the greater that implied volatility value is likely to decay when the event has taken place.

JPMorgan said buy the April 17 expiry at-the-money straddle on SPDR Gold Shares (GLD).

The bank also thinks that cyclical stocks, particularly industrials, are “likely to face significant headwinds due to rising trade policy uncertainty, which discourages capex on equipment, a key driver of industrial demand.”

Meanwhile, utilities “have the best risk-reward among sectors, as they have the lowest sensitivity to policy, continued demand for AI, and high interest in companies directly exposed to data centers or involved in nuclear projects.”

JPMorgan notes that option volatility for the Industrial Select Sector SPDR ETF (XLI) is richer than that of the Utilities Select Sector SPDR ETF (XLU). And so it suggests selling a 3-month XLI call option with a strike 5% above current market price (known as 105%) and using the funds to buy 1.1x 3-month 105% XLU calls.

For investors who think that economic data remains resilient and the market is not in the midst of a structural regime change, JPMorgan screened for momentum names that have fallen more than 15% since the market peak, have an overweight recommendation from the bank’s analysts, and have liquid options that have inexpensive volatility.

From that they suggest buying short-dated call options on the likes of Vistra, Delta Air Lines, Broadcom, Arista Networks, Carnival, Nvidia and Walmart, among others.

Next, they looked at what they called “crowded” low volatility stocks and filtered for those with underweight ratings from JPMorgan analysts, and which have rallied more than 5% since the market peaked on Feb. 19, and also have liquid options with inexpensive volatility.

They suggest buying short-dated puts for that list, which includes Northrop Grumman, Chubb, Yum Brands, Kinder Morgan and Verizon.