If you want to live a long life, do not play in heavy traffic. That goes for your financial life as well. This could be the heaviest quadruple option expiration of the entire year. More than $1 billion in S&P options will expire at the open on Friday.
Today was an interesting day in the options market. Normally the S&P will gravitate to the "max pain" point prior to expiration. That is the point where the most options expire worthless on both puts and calls. The max pain point was 2,050 on the S&P or $205 on the SPY. We touched that exactly at the intraday lows but then rocketed back to 2,080 ($208) at the close. For the S&P the options expire at the open on Friday. I cannot imagine the market makers being able to force the S&P back to that 2,050 level so a lot of put options are going to expire worthless but almost an equal number of call options will be in the money. This rarely happens.
There were four major buy programs in the market today. Somebody was managing the market to keep the S&P as far away from 2,050 as possible. They definitely succeeded in the +262 point rebound in the Dow and +30 point rebound in the S&P.
Friday will probably be the highest volume day of the year and it could be volatile. I am recommending we not add any new plays tonight.
NEW DIRECTIONAL CALL PLAYS
No New Bullish Plays
NEW DIRECTIONAL PUT PLAYS
No New Bearish Plays