A Road Map for Trading During November Options Expiration Week


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We're currently on the cusp of options expiration week. Therefore, exchange-traded fund ( ETF ) options may impact the price action and levels to watch during the course of the week. For example, the 127 and 128 areas on the SPDR S&P 500 ETF ( SPY ) -- which correspond to 1,270 and 1,280 on the S&P 500 Index (SPX) -- are the site of heavy call open interest relative to put open interest, and could act as resistance on rallies. Pullbacks to 124 or 125 -- which correspond to 1,240 and 1,250 on the SPX -- could provide support, as these strikes are home to heavy put open interest.

SPY November open interest configuration

Technical speed bumps remain overhead, and headline risks linger, suggesting hedging is still a prudent strategy. But a breakout above resistance levels could be very rewarding for bulls, as short-covering activity and an abundance of sideline cash could provide the fuel to drive equities during a seasonal period that favors the bulls.

The excerpt above was originally published in Monday Morning Outlook , our weekly analysis of the stock and options markets. To read more of Todd's analysis, click here to view the full article.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing Options
Referenced Stocks: ETF , SPY

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