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.
- Outside of expiration Fridays, approximately 1.8% of stocks closed within a penny of a round dollar amount.
- On monthly expiration days, this percentage slightly increased to 1.9%, and on quarterly expiration days, it reached 2%.
Read the full story here.