The Christmas market is warming up, but the real highlight is the options expiration on the 27th!

1. Initial warming of the Christmas market

• Current market sentiment has improved, with small price fluctuations and some funds attempting short-term entry.

• This warming may only be a precursor to positioning before the options expiration, and investors should not be overly optimistic.

2. The expiration of options on the 27th is crucial

• Options expiration scale: Approximately 40% of options contracts will expire on the 27th, involving a large amount of capital settlement.

• Noticeable position shifting: Recently, there has been a phenomenon of options position shifting in the market, with trading volume and open interest moving to next month's contracts, and implied volatility (IV) significantly decreasing.

3. Potential market impact

• Increased short-term volatility: As options expiration approaches, re-pricing of capital may trigger significant fluctuations.

• Direction of position shifting: Pay attention to the flow of funds after position shifting, which may determine next month's market tone.

Recommendations

• Short-term traders: Monitor options data, beware of volatility risks, and set stop-loss and take-profit levels.

• Medium to long-term investors: Wait for the market direction to become clear after the 27th before deciding whether to adjust positions.

Stay vigilant; although the Christmas market is warming, the real test is still ahead!