Happy $5.3 trillion triple witching Friday
All three major U.S. stock indexes modestly red
Utilities lead S&P sector gainers; Materials weakest group
Euro STOXX 600 index down ~1.4%
Dollar gains; bitcoin edges higher; gold up >1%; crude dips
U.S. 10-Year Treasury yield edges up to ~3.76%
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HAPPY $5.3 TRILLION TRIPLE WITCHING FRIDAY
As if the week for markets hadn't been busy enough, Friday throws triple witching into the mix which could heighten volatility.
Triple witching is the simultaneous expiration of single stock options, stock index futures, and stock index options contracts that happens once a quarter.
Options referencing about $5.3 trillion of equities are set to expire today, according to analysis from Asym 500.
That includes notional open interest of $3.3 trillion in stock index options, $645 billion in exchange-traded-funds options, and $620 billion in options on single stocks.
Trading volumes and volatility tend to jump on triple witching days, as traders roll over existing contracts and add to positions.
Of course, today's triple witching caps a week that saw the Federal Reserve cut rates for the first time in four years, that too by an outsized 50 basis points cut.
The S&P 500 .SPX rallied to record highs on Thursday, but has eased in early trading on Friday.
"I would peg a lot of today's action to the triple witching expiration," said Bret Kenwell,US Investment and Options Analyst at eToro.
"Post the options expiry, September anyway tends to be pretty choppy seasonally, so it wouldn't be weird to see a little choppiness here in the next few weeks."
The S&P 500 also rebalances today, with Dell Technologies DELL.N, Palantir PLTR.N and Erie Indemnity ERIE.O set to join the benchmark, as per an earlier announcement.
It's likely volume in those shares rises ahead of the market close today. The three companies are currently down between 0.4% and 2.3%.
Most stocks tend to rally after their inclusion in the S&P 500 is announced, then plateau or drop when officially added, Jay Woods, chief global strategist at Freedom Capital Markets said in a Monday note.
(Lisa Mattackal)
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FOR FRIDAY'S EARLIER LIVE MARKETS POSTS:
WALL ST STEPS BACK AS IT DIGESTS FED WEEK - CLICK HERE
KBW SAYS WELLS FARGO'S LATEST REGULATORY WOES RAISE UNCERTAINTY AROUND ASSET CAP LIFT - CLICK HERE
S&P 500 INDEX: NEW HIGHS, BUT ORBS OF INFLUENCE ARE OUT THERE - CLICK HERE
TIME TO FIGHT THE FED? - CLICK HERE
BOE AND FED TO KEEP GOING THEIR SEPARATE WAYS - CLICK HERE
HIT THE SHOPS! SELL THE SHARES - CLICK HERE
CHINA WORRIES HIT EUROPE, AGAIN - CLICK HERE
SET FOR LOWER OPEN, BUT ALL GOOD REALLY - CLICK HERE
MORNING BID - BOJ BRINGS YEN INTO SHARPER FOCUS - CLICK HERE
Opening snapshot https://reut.rs/3XRjlb0
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