Options Expiration Is Playing An Important Role In Market Volatility

The squeeze continues and options expiration beginning tomorrow is playing a much bigger role than most might suspect. From past experience as an options principal and under these conditions, floor brokers are hunting down options strike prices like we should be bin Laden. It’s a “seek and destroy mission” and these guys are having a field day. Naturally they’re being abetted by our government with direct market and indirect interference to buy stock with your tax dollars. They’re succeeding in their socialization free markets. And, by the way, shouldn’t we have Chucky Schumer lead a congressional investigation into short selling of crude oil?

Nevertheless the squeeze continues and short sellers are being punished “for now”.

It may be Yahoo [[yhoo]] is working on their data presentation to the extent that volume data for the NYSE has been flipped. Yikes! One would assume WSJ data is correct.

They don’t call After Hours trading the Amateur Hour for nothing, but here it is via MarketWatch at 5:40 PM EDT with a lot of stocks taking it on the chin:

In the meantime our tax dollars are at work via the Fed today as they lent roughly $25 billion to the primary dealer network. Membership has its privileges.

Elsewhere most ships are rising with the tide.

Sometimes you eat the bear and sometimes he eats you. That’s an old expression with the former being today’s reality.

This bear market rally is wild what with over 450 points on the DJIA in just two days for example. One thing with bear markets is how hard and long you work to build profitable positions that Da Boyz can take from you in just a few days if you’re emotional. But you must remain disciplined and systematic. That’s not an easy thing for most investors. Frankly many are just happy to rest on the sidelines and watch the carnage and that’s understandable. But folks like us must do our thing.

Tomorrow is options expiration. Remember this market is being run and manipulated by professionals whether in the government, trading desks, hedge funds and on the options floor. It’s the way of it right now.

Have a pleasant weekend.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: (SPY), (SDS), (MZZ), (IWM), (TWM), (QLD), (QQQQ), (XLY), (SCC), (XLI), (SIJ), (XLB), (SMN), (IYR), (SRS), (GLD), (DBP), (DBA), (DAG), (EFA), (EFU), (EEM) , (EEV), (EWZ), (RSX), (FXI) and (FXP).

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