$5.8 Trillion in Stock Options Set to Expire Friday, Analysts Warn of Increased Volatility

The upcoming triple-witching event on June 20 could trigger significant market fluctuations as various derivatives contracts reach expiration.

Summary

The stock and crypto markets may experience heightened volatility on June 20 due to a major triple-witching event, where $5.8 trillion in stock options, including $4.2 trillion in index options, will expire. Analysts suggest this could set the stage for sudden market movements in the following week, although immediate fluctuations may not occur on the day itself.

Terms & Concepts
  • Triple Witching Day: A term used to describe the expiration of stock options, index options, and futures contracts on the same day, which can lead to increased market volatility.
  • Index Options: Options contracts that give the holder the right to buy or sell an underlying index at a specified price before expiration.
  • ETF Options: Options contracts that give the holder the right to buy or sell an exchange-traded fund at a specified price before expiration.