Freaky Fridays for Options Buyers
Stock “pinning” is the tendency of stocks to close precisely at their nearest option strike price and is a regular feature of expiration Fridays. A Wall Street Journal examination of trading behavior from the start of 2007 through April 2013, using a list of all U.S. stocks with options from DeltaNeutral.com, gives a sense of the phenomenon’s prevalence. We analyzed trading behaviors from 2007 to April 2013 using U.S. stocks with options data....