The closing bell - It’s a quad witching expiry day along with a special S&P 500 inclusion, creating a super volume storm for traders (although most of that coming near the close). The Tesla event has been well flagged, but that coincides with an estimated 90mln option contracts expiring (+24% y/y). Once those have expired, taking some of the S&P gamma hedging with it, the broader indexes could have some breathing room into year-end (Nomura sees 38% of S&P gamma hedges removed today). The S&P is currently sitting just below one of the main levels (3700), with Homebuilders (ITB +83bps) rallying for a second day. Energy and Autos are the laggards, albeit that latter sector will get a nice bump when the new entrant arrives. While the S&P and Nasdaq are lower, the Russell 2k is higher by 59bps, getting a nudge by growth (IWO +1%). Stimulus talks are ongoing in Washington.
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