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$6.5 Trillion Options Expiry Sets Stage for Market Volatility

$6.5 Trillion Options Expiry Sets Stage for Market Volatility

Published:
2025-06-19 16:57:01
19
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A massive $6.5 trillion notional options expiry is poised to disrupt stagnant equity markets this Friday. The event, known as 'triple witching,' marks the quarterly simultaneous expiration of exchange-traded contracts. While immediate chaos isn't anticipated, the clearing of these positions could unleash pent-up market movements.

The calm before the storm reflects a 'pinning' effect from bearish options trades placed during earlier market turbulence. Asym 500 LLC's Rocky Fishman notes these hedges were implemented when S&P 500 recovery seemed improbable. Dealers have maintained suppressed volatility through strategic exposure management, particularly around the 6,000 strike level that once appeared untouchable.

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