The options expiration week effect is a seasonal trading phenomenon with an average gain of 0.2%, a 60% win ratio, and balanced outcomes between winners and losers. This strategy adds a unique edge during options expiration week.
This one really does have to be a big week for the markets. End of Month Options on the big S&P and the little/Emini S&P 500 expire Monday at 15:00 CST. The Feds makes a little noise on Wednesday, and then it’s First Friday, leaving just two days before the election, another great excuse reason to make outsized market moves. Now the fun begins, the games get more dangerous and dramatic, and the daily efforts by the disinformation crowd to explain ups one day and downs another get comical.
Overnight markets trended slowly, the 7:30 news sent each sprinting, and they have resumed trading ranges 15 minutes before the NYSE open. The ZB, most clearly, has accumulated and stayed in its range. ZB has banked Shorts from 166 ‘8 down to 165 '18 with 165 -31 and 165 '18 being the upper and lower points of strength. The November CL contract has continued in a trending trading range downward, and is net long in the overnight. It has no consistency in the overnight session. The overnight range looks like a trading range setup.
The ES has moved right to where it needs to be for the SPX Options Expiration at08:30 CT–at the bell. That is one of two Op-X events we are watching today. The other comes at 15:30–the closing bell for the SPY. The ES is strongly net long in the overnight session in numbers, but support and resistance are interspersed and a trading range setup is in place.