Viewpoint: Trillions of dollars in expiring options will trigger two weeks of volatility in U.S. stocks

BlockBeats reported on June 18 that Scott Rubner, Head of Equities and Equity Derivatives Strategy at Citadel Securities, stated that the US stock market may experience a period of heightened volatility in the next two weeks, mainly due to technical factors rather than changes in fundamentals. He pointed out that starting from June 19, the market will face the largest options expiry in history, along with quarterly pension portfolio rebalancing and concentrated adjustments in major investor group positions.

He called this stage "one of the most technically critical periods of the year", with the importance of capital flows significantly outweighing fundamental factors. Although there may be short-term disturbances, Rubner still advises investors to view the volatility as a "technical phenomenon" and to buy on dips during market corrections. In his view, once the next two weeks and the quarter-end pass, the market environment will significantly improve.

Rubner stated that current retail investment behavior is shifting: "Unlike in the past when they only chased high-risk assets, retail investors are increasingly concentrating on companies aligned with institutional allocations, which can drive benchmark index performance." More importantly, US households currently hold record levels of cash and are waiting to enter the market during a correction. He noted that this capital characteristic typically changes only when the Chicago Board Options Exchange Volatility Index (VIX) rises above 30, while the current VIX is about 16, which remains at a low level.

With support from multiple sources of funds, Rubner believes that after entering the second half of the year, "the main theme for US stocks remains to be upward."