Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Single stock options worth $1.2 trillion set to expire - Options Solutions

Published 2022-01-21, 09:42 a/m
Updated 2022-01-21, 10:23 a/m
© Reuters. FILE PHOTO: Traders work at the post that trades JP Morgan on the floor of the New York Stock Exchange May 11, 2012.  REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS)/File Photo

© Reuters. FILE PHOTO: Traders work at the post that trades JP Morgan on the floor of the New York Stock Exchange May 11, 2012. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS)/File Photo

By Medha Singh

(Reuters) - Single stock options totaling about $1.28 trillion were set to expire on Friday, potentially driving sharp market movements as Wall Street rounds out a turbulent week, analysts at Options Solutions said.

The options expiration represents nearly 40% of the total open interest on a notional basis, according to the Chicago-based investment adviser.

The main U.S. stock indexes ended sharply lower on Thursday as a rally evaporated late in the session with investors contemplating whether equities were bargains after Nasdaq fell into correction territory this week.

"(The) options expiration could be another risk factor because it is so unusually large which could magnify the impact of investors adjusting expiring puts and calls," said Steve Sears, president at Options Solutions.

U.S. stocks have seen intense selling towards the end of the session this month, analysts at Bespoke Investment Group noted, adding that January was averaging one of the worst performances in the last hour on record.

© Reuters. FILE PHOTO: A Wall Street sign hangs on a signpost in front of the New York Stock Exchange August 5, 2011. REUTERS/Lucas Jackson/File Photo

The net options delta set to expire on Jan. 21 is over $2 billion, said Brent Kochuba of options analytic service SpotGamma.

Among stocks that have very large call positions expiries and could likely see wild swings were Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Tesla Inc (NASDAQ:TSLA), Meta Platforms and Google-parent Alphabet (NASDAQ:GOOGL), SpotGamma said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.