Trading Market Commentary May 18, 2017

Commentary

Yesterday the DowJones dropped more than 370 points; the VIX volatility index leaped 46%, gold had been way up gaining $23, as the US Dollar fell. The Treasury yields dropped across the board. What’ is the actual reason behind Yesterday downfall?

The expiration of options! (Not turmoil around President Trump crap). Which managed to “lift the lid” on market volatility, and set down pressure on equities. Keep in mind that options expire on the third Thursday of the each month, and the market will experience the following:

* Whenever there are a contract Investments, it is time value is going to be reduced to zero and one will be left with only the intrinsic value.

* A future contract agreement can be rolled-over for subsequent months. However, the options trader may often allow the contract reach its expiration date if it is out of money during a period of expiry, or book gain in the event the is in the money.

* Market also will go through high volatility movement.


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