Look For Expiry Driven Volatility Today

Cry Havoc! And slip the dogs of war". . .

Julius Caesar Act 3, scene 1,
270, 275

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Big quadruple option expiration today —  expect big swings. Note that this comes in the same months as the no shorting rule expired.

"The U.S. stock market’s wildest swings since 1929 may get even bigger as almost 80 million options expire today.

Owners of the contracts on stocks, indexes and exchange- traded funds have until today’s close to take advantage of the rights granted by the calls and puts they own. Investors are preparing for the possibility that market makers will boost volatility by buying and selling stock to hedge the risk of the option trades they have facilitated, according to Scott Nations, president of Fortress Trading Inc…

About a quarter of the approximately 337 million existing options expire today, according to Chicago-based Options Clearing Corp., which settles all trading of exchange-listed contracts and is the world’s largest derivatives clearinghouse."

It may be wild today!

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Source:
Stock Gyrations May Roil Trading as 80 Million Options Expire
Jeff Kearns
Bloomberg, Oct. 17  2008
http://www.bloomberg.com/apps/news?pid=20601213&sid=aJLOKIXVMfrc&

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