(Bloomberg) -- U.S. stocks are off to a tough start in December, and the options market is signaling that things are about to get even worse.

In an apparent large S&P 500 hedge, one investor bought 16,000 January $2,980 put options that target a decline of about 4.5% in the index from its current level. That trade cost almost $32 million and appears to protect approximately $4.8 billion of assets.

The transaction came as the S&P 500 fell as much as 1% on Monday, its biggest drop since early October. An options trade of that magnitude “quickly pressured stocks” when it crossed, Matthew Brill, head of derivatives trading at Tourmaline Partners, said in an interview.

“The index quickly shed almost 0.5% as it needed to absorb almost $1 billion of stock for sale,” Brill said. The move reflects a recent trend of traders buying 5% out-of-the-money puts for one- to three-month durations on assets linked to broader markets rather than individual securities, Brill said.

The S&P 500, which rallied 3.4% in November, fell Monday on reports that President Donald Trump will increase tariffs on China if Washington and Beijing can’t reach a trade agreement and U.S. economic data missed estimates.

(Updates with options trader comment in fourth paragraph.)

To contact the reporter on this story: Gregory Calderone in New York at gcalderone7@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer, Dave Liedtka

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