Friday could be a wild day of trading on Wall Street. Here's why
December options expirations are typically the biggest of the year, but this one eclipses all prior records, Goldman said.
TL;DR
- The largest options expiration on record is expected to cause volatility on Wall Street.
- This expiration coincides with a 'Quadruple Witching' day, where four types of options expire simultaneously.
- Over $7.1 trillion in notional options exposure is set to expire, with $5 trillion tied to the S&P 500.
- The expiring options represent about 10.2% of the Russell 3000's total market capitalization.
- Choppy trading and high volumes are anticipated, particularly around key S&P 500 levels.
- Some individual stocks may see price stabilization ('pinning') if options traders adjust hedges on at-the-money contracts.
- Stocks like GeneDx Holdings, BILL Holdings, Avis Budget Group, and GameStop could be prone to pinning.