Triple Witching Roils Market Where Traders Pay Up for Hedges
- Busy week gets busier as event helps spark trading volume
- About $3.4 trillion of equity options estimated to mature
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Like clockwork, the S&P 500 just endured another mid-month swoon before Friday’s options expiration. What’s less certain is whether the market can resume its record-setting rally at a time when traders are busy loading up on hedges.
As expected, stock transactions spiked as the expiry of stock and index options collided this time with that of index futures in a quarterly event known as “triple witching.” About 16 billion shares changed hands on exchanges, 60% above the three-month average, as the S&P 500 dropped almost 1%.