Triple Witching to Hit Market Where Traders Pay Up for Hedges

Triple Witching to Hit Market Where Traders Pay Up for Hedges

(Bloomberg) -- Like clockwork, the S&P 500 just endured another mid-month swoon before Friday’s options expiration. What’s less certain is whether the market can resume its record-setting rally at a time when traders are busy loading up on hedges.

The expiry of stock and index options this time is part of a quarterly event known as “triple witching,” where futures on indexes also expire. Strategists at Goldman Sachs Group Inc. estimated that roughly $3.4 trillion of equity options are set to mature Friday, including $720 billion of single stock options that is expected to be the most for any September expiration.