【After the Federal Reserve's Decision Day, $6.5 Trillion in Options Expiration Becomes the Next Test for Wall Street】 Financial Association December 20, reported that as investors digest the Federal Reserve's intent to slow down interest rate cuts, the often tumultuous Friday options expiration becomes the final risk before the market experiences a wave of calm before the end of the year. According to estimates from derivatives analytics firm Asym 500, approximately $6.5 trillion in options related to individual stocks, indices, and exchange-traded funds (ETFs) will expire on Friday, the largest scale this year and historically among the highest, although slightly lower than a year ago. Given that the Federal Reserve cut interest rates for the third consecutive time on Wednesday but also hinted at a readiness to slow down the pace of rate cuts, the timing of this triple witching day is unusual. Wall Street participants may sometimes exaggerate risks, but trading volume often surges on triple witching day, and with options expiration or traders establishing new positions, stock price fluctuations are not uncommon.
