US Market Watchers Are Fretting Over the Biggest January Options Expiry in a Decade
- Getting out of market around OpEx has been a winning trade
- Demand for hedge creeps up with skew hitting three-month high
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Market watchers on Wall Street attribute this week’s stock selloff to the insidious threat of recession. Yet derivatives traders see a less ominous foe: the mass expiration of options on Friday — the biggest January event in a decade.
Sitting on the sidelines when the contracts roll over has proved a winning strategy of late. That includes this week with the S&P 500 falling for three straight sessions, the 12th time out of the past 14 months that the index has dropped around the time of OpEx.