Options Expiration Volatility Should Continue
This trading week has been like a see-saw, one day the markets are up and the next day they are down. During the week of trading leading up to options expiration Friday the markets will usually be very volatile. Traders and investors must remember that there will usually be a lot of game playing by the large financial institutions that can move markets. Remember, the guy at home with a small online trading account is not moving the markets, it is the large institutions that have billions of dollars that will move the markets. When an institution has that kind of capital it is always possible to push the markets in their favor for five trading days. Often, the large institutions will move stocks away from the popular strike price that the small retail options trader is hoping for. These types of activities will occur each and every month during the week of options expiration.
Traders should always watch for extreme volatility in many of the leading and popular technology stocks. Stocks such as SanDisk Corp (NASDAQ:SNDK), F5 Networks Inc (NASDAD:FFIV), Netflix Inc (NASDAQ:NFLX), and Salesforce.com Inc (NYSE:CRM) will usually be very volatile, especially intra-day. This is a good trading week for scalp trading where traders look to take a small bite out of the market during the trading day. It is much more difficult to hold stocks for longer periods when the markets are so volatile and trend-less.