Here's how I think it will go, but I don't claim to be an expert, and have been wrong many times before:
On option expiration days, there seems to be a tendency to close near a strike price, or halfway between. I wouldn't be surprised to see it close near 30 today. It's not a conspiracy or anything, just the result of arbitrage on options with rapidly declining time premium. On Monday, there will be a scramble to establish new option positions. If underlying sentiment, especially in the short term crowd, is bullish and calls are being bought, that will pull the stock up. If "insurance" in the form of puts is being bought by the skittish, it'll push the stock down. Tuesday may continue Monday's momentum, whichever way it goes. Wednesday will be the best indication of underlying direction.
It's a pity options have such an effect, but I think they do. Of course, news events can intervene and break the pattern. The inauguration could be one such event.
All JMHO. Not intended as investment advice.
Charles Tutt (TM) |
