'This is a no-rules market'. Goldman strategist explains why recent stock moves have confounded traders.

Systematic option traders and funds have significant control over the US stock market, reducing the impact of fundamental news, such as Nvidia's earnings report, and contributing to increased market volatility.

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Relevant topic timeline:

8/22/2023

Wall Street blamed zero-day option traders for a sudden stock-market selloff. But a BofA team says they got it wrong.

A team of equity-derivative strategists at Bank of America argues that the influence of rising zero-day option volumes has been exaggerated and that other factors, such as rising Treasury yields and trading by systematic quant funds, were likely the drivers of a sharp move lower in the S&P 500.

9/10/2023

Hedging Costs Rise as Stocks Extend Gains Ahead of Key Inflation Data

Investors are paying more for options that hedge against a decline in the S&P 500, indicating rising concerns about a downturn amid economic troubles in Europe and China, ahead of crucial readings on US consumer prices and the Federal Reserve's interest-rate decision.

9/14/2023

Triple Witching Event This Friday Could Lead to Market Volatility

Stock traders are bracing for potential turbulence as $4 trillion of options contracts tied to stocks and index options are set to mature this week, coinciding with the rebalancing of benchmark indexes, though some investors remain optimistic about a potential fourth-quarter rally.

9/21/2023

Stocks Plunge as Options Trading Triggers Wave of Automated Selling

U.S. stock prices are in a danger zone that could trigger "mechanical selling" and accelerate a downward move, according to strategist Charlie McElligott, as surging Treasury yields and a hawkish Federal Reserve put pressure on growth stocks, potentially leading to options dealers selling stock futures and exacerbating the market weakness.

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Posted 8/25/2023, 8:58:00 PM