Why Friday Could Be an Extremely Volatile Trading Day

Wall Street could face a highly volatile end to the week as traders prepare for what Goldman Sachs says will be the largest options expiration on record.

Options expiration days are a regular monthly event when short-term derivative contracts expire. However, this Friday is one of the rare occasions (only four times a year) when options on four different types of instruments expire simultaneously—index options, single-stock options, index futures, and options on index futures. This is known as a “quadruple witching” day.

According to Goldman Sachs, options with a notional value exceeding $7.1 trillion are set to expire this Friday, including about $5 trillion tied to the S&P 500 index and nearly $880 billion linked to individual stocks. December expirations are usually the largest of the year, but this one surpasses all previous records.

The scale is highlighted by the fact that the expiring options represent a notional exposure equal to roughly 10.2% of the total market capitalization of the Russell 3000 index.

This dynamic could lead to choppy and jittery trading, especially around key technical levels in the S&P 500, says Jeff Kilburg, founder and CEO of KKM Financial.

“I expect volumes to be well above normal as options traders finalize their 2025 profits and losses,” he notes. “However, much of the repositioning already seems to be behind us. The 6800 level is a key strike for the S&P 500, and we’ll see if the bulls can defend it after pushing the index back above it this morning.”

The S&P 500 is up about 15% year-to-date and was trading around 6,770 points on Thursday.

While the overall market may experience elevated volumes and volatility, individual stocks with high open interest could behave differently. When options traders who hedge their positions hold significant amounts of “at-the-money” options, the expiration itself can actually stabilize prices rather than amplify swings. These options have strike prices close to the current price of the underlying asset.

As traders adjust their hedges, prices are often “pulled” toward the most actively traded strike levels—a phenomenon known as a “pin,” where stocks hover near key price levels until the session closes.

According to Goldman, this often creates a favorable environment for large investors looking for an opportune moment to enter or exit a position.

Stocks for which Friday’s expiring options represent a significant portion of their typical daily trading volume—and are therefore more susceptible to this “pinning” effect—include GeneDx Holdings, BILL Holdings, Avis Budget Group, and GameStop.