While many options expire on Friday on Wall Street, eyes are on the Nasdaq adjustment that will come into effect on Monday.
The “rebalancing” process to reduce the dominance of tech giants in the Nasdaq 100 index begins next week.
Passive investors are expected to adjust their portfolios and market volatility before the changes take effect on Monday.
In addition, a large number of options are expiring on Wall Street today.
According to Asym 500 Founder Rocky Fishman, options contracts on stocks and indices that expire amount to $2.4 trillion.
Known as OpEX, this often results in traders either reopening their expired positions or opening new positions.
The coincidence of the change in the technology-heavy index and the expiration of options also coincides with a period when investors are waiting for the balance sheets and the Fed meeting next week.
According to Dennis Davitt, Millbank Dartmoor Portsmouth Fund Manager, inflows to normally illiquid stocks increase during this period, while more liquid stocks may be sold.