Record $5.15 Trillion S&P 500 Options Expiry to Fuel Volatility
A record $5.15 trillion in S&P 500 options are set to expire on June 19, the largest monthly expiration ever. The removal of hedging positions tied to geopolitical risks may amplify market swings.
A historic $5.15 trillion notional value of S&P 500 options is set to expire on Friday, June 19, marking the largest monthly options expiration on record. Of this total, $4.84 trillion is tied to S&P 500 index options, while the remaining $307 billion consists of options on the SPDR S&P 500 ETF ($SPY).
A significant portion of these options were purchased by investors as protection against the Iran conflict. Once that protection expires, the market loses a key source of stabilizing hedging flows, increasing the likelihood of larger price swings in either direction.
Traders are bracing for heightened volatility as the week ends, with the massive expiry potentially acting as a catalyst for sharp moves.
Source: The Kobeissi Letter