Stock market today: Dow, S&P 500, Nasdaq futures stall as Trump sets deadline for US joining Mideast conflict
Bloomberg reports:
Investors are bracing for $6.5 trillion of notional US options expiring on Friday, in a move that could free stocks to swing more wildly than the subdued changes seen in recent weeks.
Every quarter, a cluster of different exchange-traded derivatives contracts all terminate on the same day, leading to what is sometimes dubbed a “triple witching” event by market watchers. The event isn’t expected to add additional volatility on Friday itself, but could open a path to more sudden stock market moves next week.
Daily gyrations in US stocks have been relatively restrained since early May, a situation helped by the pinning effect of a swath of bearish options trades placed earlier in the year — when the chances of the S&P 500 (^GSPC) making a recovery to near-record highs seemed remote, according to Rocky Fishman, the founder of research firm Asym 500 LLC. “Pinning” refers to the tendency of a stock price to close near the strike of heavily-traded options as the expiration date nears. …
It was different during early April’s tariff turmoil, when many intermediaries found themselves having to dump stock into falling markets, and then buy it back as markets rose, exacerbating swings, according to Matthew Thompson, co-portfolio manager at Little Harbor Advisors.