The largest September "Triple Witching" Set for Friday, as $5.3 Trillion in Options Expire

This Friday marks a significant event for U.S. markets as options and futures contracts worth over $5 trillion are set to expire.

The event, known as "Triple Witching," occurs quarterly on the third Friday when stock index futures, stock index options, and individual stock options all expire simultaneously.

This particular September is poised to set a record for the largest "Triple Witching" in history, with over $5.3 trillion in options expiring.

According to Goldman Sachs expert John Marshall, the expiring options include $3 trillion in S&P 500 index options and $935 billion in individual stock options. The total nominal value of these expiring options is equivalent to 8% of the Russell 3000 Index's total market value, marking the largest scale for any September "Triple Witching" to date.

Options analysis firm SpotGamma highlights that nearly 90% of the expiring positions are call options. As these positions are closed, dealers will unwind their stock long positions used for hedging, potentially removing a significant source of market support.

Goldman Sachs predicts that the market's upward momentum is likely to continue until the options expiry event concludes, often associated with the "gamma squeeze" effect, followed by a potential pullback next week.