Historically on options expiration days especially, as we enter the witching hour (an hour before the stock market closing bell) things get very volatile.
4 Things to watch for on options expiration:
- Violent Swings either up or down
- Market velocity; how many times it crosses into positive territory from negative and vice versa
- The Volatility Index (VIX); anything below 30 is a sign of market stabilization, watch for the VIX to turn positive (currently down 1.42 points to 24)
- Option premiums explosion; sometimes the time value premiums on options get pushed up, as many traders are trying to close positions and will pay higher premium just so the stock is not assigned
I assume the stock market is about to get real volatile…
