Latest news with #equityoptions
Yahoo
14 hours ago
- Business
- Yahoo
Wall Street Braces for a $6.5 Trillion Shake-Up -- Will Stocks Break Free Next Week?
A wave of nearly $6.5 trillion in US equity options is about to roll off this Fridaypossibly setting the stage for a new round of stock market turbulence. Tesla (NASDAQ:TSLA) and other popular names sit at the heart of this quarterly triple witching event, where index options, single-stock options, and ETF contracts all expire at once. While the expiry itself may not trigger a sharp move on the day, the aftermath could look very different. Rocky Fishman, founder of Asym 500, called this one among the largest ever and flagged the potential for markets to finally break free from the tight range theyve traded in since May. Whats held stocks in check? According to Fishman, a wave of defensive trades earlier this year effectively pinned the S&P 500 around current levels. During Aprils tariff-fueled volatility, many investors bought downside protection while selling upside calls near 6,000 betting the index wouldnt get that high. As those trades expire, that ceiling could lift. Its all tied to how dealers hedge. When markets are in a positive gamma regime, as they are now, dealers tend to smooth volatilitybuying when stocks drop and selling into rallies. But once those positions expire, that cushion may disappear. Some strategists are watching closely. Matthew Thompson at Little Harbor Advisors sees these expiry windows as chances to make volatility plays in his ETF strategies. Citigroup analysts Vishal Vivek and Stuart Kaiser note that triple-witching days usually arent much more volatile than regular monthly expiriesbut this one stands out due to sheer size. Citi estimates $5.8 trillion in contracts are expiring, while Fishman includes additional index futures options to arrive at $6.5 trillion. Either way, the hedging flows that follow could be a key driver of what comes next. This article first appeared on GuruFocus.
Yahoo
14 hours ago
- Business
- Yahoo
Wall Street Braces for a $6.5 Trillion Shake-Up -- Will Stocks Break Free Next Week?
A wave of nearly $6.5 trillion in US equity options is about to roll off this Fridaypossibly setting the stage for a new round of stock market turbulence. Tesla (NASDAQ:TSLA) and other popular names sit at the heart of this quarterly triple witching event, where index options, single-stock options, and ETF contracts all expire at once. While the expiry itself may not trigger a sharp move on the day, the aftermath could look very different. Rocky Fishman, founder of Asym 500, called this one among the largest ever and flagged the potential for markets to finally break free from the tight range theyve traded in since May. Whats held stocks in check? According to Fishman, a wave of defensive trades earlier this year effectively pinned the S&P 500 around current levels. During Aprils tariff-fueled volatility, many investors bought downside protection while selling upside calls near 6,000 betting the index wouldnt get that high. As those trades expire, that ceiling could lift. Its all tied to how dealers hedge. When markets are in a positive gamma regime, as they are now, dealers tend to smooth volatilitybuying when stocks drop and selling into rallies. But once those positions expire, that cushion may disappear. Some strategists are watching closely. Matthew Thompson at Little Harbor Advisors sees these expiry windows as chances to make volatility plays in his ETF strategies. Citigroup analysts Vishal Vivek and Stuart Kaiser note that triple-witching days usually arent much more volatile than regular monthly expiriesbut this one stands out due to sheer size. Citi estimates $5.8 trillion in contracts are expiring, while Fishman includes additional index futures options to arrive at $6.5 trillion. Either way, the hedging flows that follow could be a key driver of what comes next. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
Morgan Stanley to Shutter Electronic Equity Market-Making Unit
(Bloomberg) -- Morgan Stanley is shuttering a unit focused on electronic market-making for US equity options, retreating from a corner of the derivatives landscape that's grown increasingly popular with retail investors, even as trading volumes boom. Security Concerns Hit Some of the World's 'Most Livable Cities' JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads How E-Scooters Conquered (Most of) Europe Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports The business, known internally as automated market-making, is being closed, according to two people familiar with the matter, who asked not to be identified because the information is confidential. While US derivatives activity has surged, the space has come to be dominated by proprietary firms like Citadel Securities and IMC Trading BV. The exit underscores how traditional players have struggled to keep pace with businesses natively built for speed and scale, aided by specialized technology and fewer regulatory constraints. A spokesperson for Morgan Stanley declined to comment. The firm has been the last major bank still in the business of paying retail brokers for options order flow, something that's now largely the preserve of high-frequency trading institutions. In one indication of its share of that market, Morgan Stanley accounted for 6.4% of such payments among market makers in the first quarter, Bloomberg Intelligence's analysis of regulatory filings show. The top four firms, led by Citadel Securities, were all principally proprietary firms. Morgan Stanley is working to place some employees from the unit in other roles at the firm, people familiar with the matter said. --With assistance from Alexandra Semenova. Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? How a Tiny Middleman Could Access Two-Factor Login Codes From Tech Giants The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
a day ago
- Business
- Bloomberg
Morgan Stanley to Shutter Electronic Equity Market-Making Unit
Morgan Stanley is shuttering a unit focused on electronic market-making for US equity options, retreating from a corner of the derivatives landscape that's grown increasingly popular with retail investors, even as trading volumes boom. The business, known internally as automated market-making, is being closed, according to two people familiar with the matter, who declined to be identified because the information is confidential.
