As the manager of a large diversified school endowment fund, you are actively considering implementing sophisticated derivative strategies to protect your fund's market value in the event of a substantial decline in the vast level of equity princess.

Your colleagues have suggested that you acquire either (1) a short position in a S&P 500 index futures contract or (2) a long position in an S&P index put option contract.

Explain how each of these strategies would affect the risk and return of the augmented endowment portfolio.