Option expiration and Option pain

Option expiry closing prices cluster around strike prices for the benefit of specific option writers

  • Fact (There is fact supporting this)

    Votes: 0 0.0%

  • Opinion (There is no fact supporting this)

    Votes: 4 80.0%

  • Myself or someone I know engages in this type of hedging activity

    Votes: 1 20.0%
  • Total voters
    5
You asked one question and tied it to an assumption. Each of us can have an opinion on, "do you think Option expiry closing prices cluster around strike prices," and if you do think so, do your think it is done by option writers for their benefit, implying manipulation.

I would agree that a large open interest in one strike, can have the effect of dragging a closing price near the strike. But I don't have evidence to point to manipulation by short option traders. I make the assumption that auto hedging from both the longs and short, and traders exiting their positions near expiration can cause this.

Just my opinion.
 
I think it's simply an indirect side effect that people want to put a label on - much like bogeyman MMs hunting their stops 50 pts away from market.
 
You must log in or register to reply here.
Back
Top