Crazy Ending To Options Expiration


Simpler Trading Team

Aug 19th 2022  .  3 min read

Overnight into the Friday cash session open, both the S&P 500 futures and the Nasdaq were trading lower.

The move was significant enough to cause key stocks, such as BBBY, GM, and AAPL, to gap down. There was clear selling pressure overnight and the question of, “Would it continue?,” was on the mind of traders.

Well, the answer to that question did not take long as both the S&P 500 and Nasdaq quickly started to continue their pullback at the opening bell. There were only a few minutes before the bears took full control of the market. The bears held a constant and strong pressure of selling for the majority of the opening hour. 

Once the initial pressure of the bears began cooling off there was a moment of consolidation as the bulls tried to take over. However, the bears still maintained their pressure not allowing the bulls to officially take over. This consolidation period lasted for roughly an hour before the bears won, bringing both the S&P 500 and Nasdaq to new lows on the day.

Eventually the bulls did get tired. Once their exhaustion settled in from dominating the greater first half of the day, the bulls were able to have their fun. The bulls took the next several hours fighting back to gain back session losses. This was a strong and consistent push that would eventually be met with resistance from bears later in the session.

When the bulls met the bears again, the bears were ready to win and dominate. Both the S&P 500 and the Nasdaq were quickly rejected at the volume weighted average price (VWAP). At VWAP the bears took back full control of the market bringing price in both the Nasdaq and the S&P 500 to and through the previous low of day made in the morning session.

This selling pressure was strong and consistent all the way to the final hour of the market.

In the last hour of the market, or power hour, the bulls finally had their chance to fight back against the bears. During this time the market fluctuated both up and down, but failed to make a significant move in either direction and that is how the options expiration week came to a close.

At the close both the Nasdaq and the S&P 500 futures ended negative on the session. The S&P 500 futures closed down 1.31%, losing 56.25 points, while the Nasdaq futures closed down 1.97%, falling 266.5 points.

Simpler Options Gold