The Big Expiration

In order to simply benefit from the big expiry, we open a long position in the S&P 500 or the DAX on Monday evening in the expiry week. We will sell our position again on Friday evening. We do the whole thing four times a year. In March, June, September and December.

Implementation could be achieved with a Future (e.g. SPX) or Contracts for Difference (CFD`s). 

Finance professionals, of course, know the importance of this day. The high financial resources at their disposal allow them to drive the markets in the direction they consider beneficial for a period of time. Which is the most advantageous direction depends on the objectives of the major players in the futures market.

The maximum pain theory is particularly important in this context. Institutional investors are usually long stocks in their basic portfolio. To improve the return in trendless phases, write call options and thus act as writers. These so-called covered purchase options (covered calls) expire on the third Friday of the last month in the quarter as described above. If the markets rise in the run-up to expiry, the covered calls must be hedged with long futures.