Short-Term Options Blamed for Sudden Stocks Plunge, Halting Near-Record Rally
• Sudden stock market drop on Wednesday attributed to recently popular "zero-day to expiry" options contracts • These short-term options act like lottery tickets for investors, but can increase volatility • S&P 500, Dow, and Nasdaq were all poised for 10-day winning streaks before afternoon plunge • Disagreement over whether options volume preceded and caused the drop, or followed market selloff • Market resumed rally the next day, with indexes moving back toward record highs