Options Solutions in the News
(Kiplinger) Stocks ended the holiday-shortened week (markets were closed Monday for Martin Luther King Jr. Day) how they started it – deep in the red.
And, as with Tuesday’s trading, the bearish catalyst today was corporate earnings; specifically, dismal results from streaming giant Netflix (NFLX, -21.8%), which reported lower-than-expected subscriber numbers for its fourth quarter and forecast slowing subscriber growth in Q1.
Another possible culprit behind today’s huge volatility is options expiration. “The options market has become critically important to stock investors, even if they don’t trade options,” says Michael Oyster, chief investment officer for asset-management firm Options Solutions.
“Friday’s options expiration was the second-largest on record as $1.3 trillion of equity options expired. This impacted how stocks behaved and drove many prices higher or lower based on options action.”