Volatile morning for the FTSE 100 on quadruple witching day
City Index September 21, 2012 4:01 PM
<p>It was a volatile morning session for the FTSE 100 on quadruple witching day, where futures and options expiries can trigger somewhat dramatic moves on […]</p>
It was a volatile morning session for the FTSE 100 on quadruple witching day, where futures and options expiries can trigger somewhat dramatic moves on the UK benchmark index.
The FTSE 100 was trading higher by 10am before contracts started to settle and this forced the index back from its highs immediately by around 40 points to trade back to flat on the day.
In truth, apart from the expiry of options, the day is likely to be somewhat lacklustre. After a really strong run in equities since the lows of June, the expiry may tell us something about how traders see equities trading over the subsequent months. If the expiry sees prices weaken, traders could use that weakness as a buying opportunity, especially considering the open endedness of the Fed and ECB’s easing programmes.
However, we will also likely start to see a better gauge of sentiment after the expiry today and whether investors are keen to buy into stocks with the same sort of aggression shown in previous weeks considering we have now seen the cards with which major central banks are playing.
From a sector perspective it is the miners that are giving the UK index heavyweight support, with gains in the sector of 0.5%. Take those gains out of the equation and the FTSE 100 would likely be suffering losses of around 0.3%. Oil and gas sector stocks have traded weaker too, despite the 0.7% gains seen in crude oil prices this morning.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.