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Interactive Options Course
Posted December 19, 2025 at 9:30 am
Briefing.com Summary:
*Trading volume should be huge today, as this is a quarterly futures/options expiration day.
*Nike is down big following its earnings report; FedEx and KB Home are also weak.
*President Trump said Fed Governor Waller had a “strong interview” for Fed chair.
There is going to be a lot of trading activity today, not so much because of the news flow but because of the options expiration schedule. Today is a quadruple witching expiration day, which involves the expiration of stock index futures, single-stock futures, stock index options, and single-stock options.
Trading volume should be huge. Goldman Sachs is estimating this expiration to be the largest on record, with $7.1 trillion of notional options exposure due to expire, including $5.5 trillion linked to the S&P 500 index and $800 billion to single stocks, according to CNBC.
That point notwithstanding, the equity market is relatively calm ahead of the open.
The S&P 500 futures are up six points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 59 points and are trading 0.3% above fair value, and the Dow Jones Industrial Average futures are down 25 points and are trading in line with fair value.
Understandably, there isn’t much conviction presently on the part of buyers, who are taking stock of the uninspired response to earnings results from Nike (NKE), which is down 11.0%; FedEx (FDX), which is down 3.7%; and KB Home (KBH), which is down 7.6%. Participants are also waiting to see if yesterday’s AI-related bounce following Micron’s (MU) stellar report has legs.
The S&P 500 broke a four-day losing streak yesterday and reclaimed a posture above its 50-day moving average, but only barely so after fading from higher levels seen earlier in Thursday’s trading as participants called into question the quality of the inflation data reported in the November CPI report.
In a CNBC interview this morning, New York Fed President Williams (FOMC voter) acknowledged that the government shutdown may have created some technical factors that biased the inflation data lower. He also noted, though, that the Fed is encouraged by what it is seeing in the inflation data but that he doesn’t have a sense of urgency to change the fed funds rate even though he expects rates will eventually be lower.
On a related note, President Trump seemed to be encouraged by what he heard yesterday in his interview with Fed Governor Waller (FOMC voter) for the Fed chair position, saying it was a “strong interview.” Mr. Waller is one of four remaining candidates. Fed Governor Bowman, reportedly, is no longer being considered for the Fed chair position.
Other central bank news today revolves around the Bank of Japan, which voted unanimously to raise its policy rate by 25 basis points to a 30-year high of 0.75%, as expected.
Also expected: the NYSE and Nasdaq said they will not be changing trading hours next week despite President Trump declaring December 24 and December 26 federal holidays. Bah humbug!
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Originally Posted December 19, 2025 – Relatively calm going into huge options expiration day
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This material is from Briefing.com and is being posted with its permission. The views expressed in this material are solely those of the author and/or Briefing.com and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Trading options on futures contracts involves substantial risk and is not suitable for all investors. Selling (writing) options on futures exposes the seller to potentially unlimited risk of loss, as the seller may be required to fulfill the terms of the contract if the market moves unfavorably. Losses can exceed the initial margin or premium received. Before engaging in short options strategies on futures, you should carefully consider your financial situation, investment objectives, and risk tolerance. You must fully understand the risks involved, including the possibility of losing more than your initial investment. The Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) require that you receive and review the Options Disclosure Document (ODD) before trading options on futures. This document explains the characteristics and risks of options trading.
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