Markets are choppy today because one of the biggest options expirations of the year is unfolding, about $3.4 trillion worth of contracts are expiring all at once.
When this many contracts roll off in a single day, the market loses a lot of the structure that was quietly keeping it stable. All week, prices were being held in place by positive gamma, which means dealers were buying when the market fell and selling when it rose. That constant balancing kept things calm, almost like invisible hands guiding the market between key levels.Now that those contracts are expiring, that stabilizing force is gone. Dealers no longer need to hedge the same way, and the market is finally free to move on its own. That’s why prices are swinging back and forth instead of staying pinned in a tight range.Source: StockMarket.News
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