Manfred J. Hattan: It's an options expiration thing. Finishing right on the nose is actually pretty rare but often stocks trade closer to their options' closest strike price than it might have absent the expiration as traders either hedge or close out their options positions and/or bulk up/lighten their stock exposures to cause/prevent options exercises. Most investors benefit from this as it reduces volatility on option expiration day.So in this case, the stock trading around $500 meant that, absent news, it was likely to stay closer to the $500 exercise price than to the next exercise prices of $505 or $495, even if those stocks in the same sector with relatively small options exposure moved up or down. Do that lots of times and you'll hit the price on the nose slightly more often than chance.
Links are submitted by members of the Fark community.
When community members submit a link, they also write a custom headline for the story.
Other Farkers comment on the links. This is the number of comments. Click here to read them.
You need to create an account to submit links or post comments.
Click here to submit a link.
Also on Fark
Submit a Link »
Copyright © 1999 - 2017 Fark, Inc | Last updated: Apr 23 2017 15:23:29
Runtime: 0.142 sec (142 ms)