Nomura Quant Says Options Shift on Wall Street Fuels Stock Rout
- S&P 500 heads for first back-to-back 1% drops since mid-June
- Further turmoil seen sparking fresh selling from quant funds
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It’s no coincidence that US stocks began their worst retreat in two months right around the time when an estimated $2 trillion of options closed out in a widely watched market event.
In the telling of Charlie McElligott, a cross-asset strategist at Nomura Securities International, Friday’s options expiration has triggered a big shift in market positioning, whereby dealers are now causing an increase in volatility after previously helping to suppress price moves.