Today is the largest stock market options expiry day of all time. What to watch for

Today is known as Quadruple Witching Friday, a rare occurrence when four types of securities have their options expire simultaneously. Goldman Sachs reported that an incredible $7.1 trillion in notional options exposure is set to expire today, representing about 10.2% of the Russell 3000's total market capitalization. This includes around $5 trillion tied to the S&P 500 and $880 billion linked to individual stocks. Typically, December expirations are the largest of the year, as both funds and retail traders look to close positions and finalize profits before year-end. However, this month’s expiration eclipses all prior records. Generally, large options expirations could lead to volatility, but due to delta-hedging, they often suppress it. Currently, S&P 500 futures are up 6 points, or 0.1%. Options often cluster around significant round numbers, positioning 6800 as a key level as S&P 500 futures hover at 6785. If this level is reached, the market could be pinned there. Additionally, the price action in major cap stocks (like Nvidia) is essential to watch, especially if we observe considerable selling in the context of the overall market stability, indicating a possible shift in investor sentiment as the AI narrative faces challenges.