Bloomberg: Stock market may decrease after quarter expiration

16 December 2022 72
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Source: Bloomberg

Author: Lu Wang

Article: Original Article

Publication date: Friday, December 16, 2022 


Bulls recovered from Fed’s hawkish tilt are about to lose the main support that this week helped them to soften the turbulence on American stock markets under influence of negative macroeconomic factors.


Today is the day of quarterly expiration for futures and options of American indices and stocks. It is expected that option pricing might be near $4 trillion.


According to Brent Kochuba, a founder of Spot Gamma, options related to the 4000 level on на S&P 500 are the major part of options with open interest. Their indices were leaning towards a price of 4,000 for several weeks. 

Considering the negative background of the last days, the possible market decrease provoked by option expiration raises more and more concerns. 


Founder of First Growth Capital LLC David Raidy says that the market is stuck in a situation where market participants have to trade against a prevailing trend by the purchase of falling stock and vice versa. 

Friday’s event “may change this situation and create room for indices’ breakthrough,” said Raidy. “It will likely be a downside move considering the adjustment of investor’s position at the end of year and forecasts of macroeconomic recession.”


Forecast: S&P will continue to decrease after the expiration

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