This Little Peggy Hit $600, This Little Peggy Hit $530, This Little Peggy Likes Stock Price Manipulation

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Today AAPL closed a shade over $530.  GOOG a shade over $600.  Another option expiration Friday, another peg for AAPL and GOOG.  These popular stocks have strong option trading interest as well and this, in my view, leaves the stock at the whim of option writers.  I have covered this topic before. 

Options in popular stocks each month at options expiration close almost perfectly at a strike price.  This is not the case the rest of the month.  Anyone who thinks this market is free and unmanipulated needs to look no further than the action that occurs on option expiration.

Even the government uses option expiration to their advantage.  I went over this in a video the other night.

September 18th 2008 on option expiration the SEC announced it was banning the short sale on all financial stocks.  Everything ripped higher.  If you wanted the most bang for your short sell banning buck you would be announcing this move on opex.  Touche!  I was holding $.20 CAT calls I sold 20 minutes into the session for $10 and $7.50. There were option millionares who bought  bank calls at $.05 and were selling at over $5.00.  It was a wild day and just what the government wanted.

 

How about two months later in November?  They leaked that Turbo Tax Timmie was to be named the next Treasury Secratary.  The DJIA ramped over 400 points in the last 2 hours of the session.  Huge money makers in the option market on that move.

So while the financial channels will tell you opex day is usually volatile, I would like to add that it is historically one of the most manipulated trading days you will see each month.

Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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