Fiscal Cliff Fears and Expiration Drive Heavy Trading

| December 21, 2012 | 0 Comments More

Nine of the ten most active options today are SPDR 500 Trust (SPY) contracts. SPY is falling $1.91 to $142.18 on heavy turnover of 122 million shares, as fiscal cliff fears and the Witch expiration conspire to drive volumes and volatility higher Friday. Meanwhile, 1.1 million calls and 1.65 million puts have traded on the ETF. Expiring December 143 calls, which are now .6 percent out-of-the-money, are the days most actives. More than 165,000 traded against just 5,563 in open interest. Some players are likely writing the OTM calls on the view the market will remain under pressure and the calls will expire worthless. Others might be taking positions on hopes for more upbeat news flow in the second half of trading. Dec 140 and 142 puts are the next most actives in SPY and implied volatility in the options on the ETF is moving up 4.5 percent to 15.5.

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Category: All ETFs

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About the Author (Author Profile)

Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.