"Wall Street stocks may be on the brink of a correction due to disturbances in the options market, according to a note written by Goldman Sachs specialist Scott Rubner on Thursday. Approximately $2.7 trillion of U.S. stock market derivatives are set to expire on Friday, which, if left unexercised, could apply pressure on stock markets and provoke volatility.These derivatives include bets on the S&P 500, as well as U.S. exchange-traded funds and individual stocks. Banks and intermediaries involved in these bets have over $9 billion of hedges against these trades. These positions have served to dampen volatility, supporting weakness and muting rallies.

Scott Rubner stated, ""Are we there yet?" - Yes, the flow dynamics change dramatically starting Monday. Lots of incoming questions this morning on market technicals. I was not planning on sending this today, but it is time for a thread. I am on the lookout for an equity market correction.

"Rubner further detailed that Goldman Sachs Derivatives Research estimates that over $2.7 Trillion of notional options exposure will expire on February 21st, including $1.2 Trillion of SPX options and $615 Billion notional of single stock options.He added that index dealers are long +$9.787 Billion of S&P 500 gamma at current spot, acting as a market buffer, supporting weakness and muting rallies. The trading team at GS estimates that 50% of this long gamma position rolls off, and the market will have the ability to move more freely next week.Due to the long gamma position in the market, 10-day realized volatility is at 8.8%, marking the lowest 10-day stretch of the year. As a result of this lower realized volatility, vol control strategies have continued to add exposure."