Options Report: After the Fed's Decision to Lift Interest Rates, Focus Turns to Monthly Contract Expiration
NEW YORK -- With the Federal Reserve's decision to raise interest rates behind it, the options market looked forward to its next signpost: tomorrow's monthly expiration of options contracts.</br></br>The problem is, traders and strategists frequently complain that expiration isn't as big an event in the options market as it once was. They say that this is partly because the position-rolling activity isn't as concentrated in the last few days leading up to expiration as it used to be.</br></br>Cibc World Markets options strategist Michael Schwartz said that a midafternoon scan of yesterday's most-active options contracts yielded few suspects for trades that were rolling positions forward, those that occur when an options player moves a position's expiration farther out, sometimes also using the opportunity to move the strike price up or down.</br></br>One possibility, though, was Cisco Systems Inc. With the stock falling 2 9/16 to finish at 58, Cisco's May 60 and June 70 calls were among the most active call contracts at the Chicago Board Options Exchange. Mr. Schwartz said that the activity may have been the result of expiration-related adjustments.</br></br>Additionally, options trading hasn't been as active as some would like. Paul Foster, options strategist at 1010WallStreet.com, complained that this week's expiration is "the driest expiration I've seen" in the past 12 months.