Stock exchange traded funds were volatile Friday in a so-called quad witching day as options expired on index futures, index options, stock options and stock futures.
“We will be watching the S&P 500 level of 1,200 closely, as there is sizable open interest in SPX index options going into today’s expiration, which could cause some interesting ‘static’ in trading over the course of the day,” said Paul Weisbruch, head of ETF/options sales and trading at Street One Financial.
He also noted despite the rally in stocks Thursday “the recent trend of upside call buying was reversed in favor of put buying.”
“In SPDR S&P 500 ETF (NYSEArca: SPY), October put buyers and call sellers surfaced, and in iShares MSCI EAFE (NYSEArca: EFA) the same activity (put buyers and call sellers) was the theme on heavy volume,” Weisbruch wrote in a note Friday.
Stocks fell slightly into negative territory Friday after opening in the green. [Small-Cap ETFs Provide Market Clues]