Insights on option expiration day for CL

J

JangoFolly

Hi. Today is expiration day for options on CL. Can someone please provide some insights about the price action on these days (e.g., commercials vs. speculators, etc.)?

Whoever's fighting to get their 64 and 64.50 calls in the money are winning, but it's been a pretty good fight (plenty of volume coming from both sides). I won't be surprised to see 65 in the next couple of minutes.

Thank you.
 
Well we have seen 65.00 now, although not until after the close. I don't have any insights into how option expiration affects futures prices either, but have long been curious. How can the major players justify throwing around the size that is required just to try to ensure that the underlying doesn't settle against their open option positions? I understand that there is a financial incentive for them to try to do so, but isn't there a tremendous risk that despite their efforts the market will run against them and result in not only a loss on the options but now on the futures as well? It has never made sense to me, but I am aware of the phenomenon so I am glad you brought this up. Hopefully someone will have some insight...
 
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