On Friday, options traders will face the first expiration of monthly contracts of 2025. Contracts tied to $4.2 trillion worth of stocks, ETFs and indexes will either be exercised, or expire worthless, according to data from SpotGamma.
The $4.2 trillion figure is smaller than December’s record-breaking “triple witching” expiration, which came in at $6.6 trillion, according to data from Asym 500.
Still, SpotGamma founder Brent Kochuba pointed out that the value of single-stock options expiring is “unusually large,” owing to Wednesday’s strong stock-market rally. He added that the expiration could mark a near-term top for the market.
“Relative call values surged due to yesterday’s large rally, and the expiring of these calls may mark a short-term top in the market, particularly ahead of the inauguration and FOMC,” Kochuba said in emailed commentary.