A simple comparison of the month end closing price based on the range of the month to the option expiration closing price based on the range of the option cycle. Data going back to 1993.
Notice the abnormally of the option expiration closing at the bottom 5%, midpoint 50% and the top 5%.
Can you explain what the “range of the option cycle” means?
With thanks in advance, MK
Instead of High / Low of a month, it is the range established from one option cycle to the next.
i.e. every 3rd Friday of each month being the cutoff date instead of month end
Is the vertical axis the % of where the closing price is in the high-low ranges based on option cycle vs month cutoffs? Not sure how to read the chart. Thank you.
yes. the first line stated something like that. it is kind of cryptic to read though.
This is another example of recurring patterns happening right in front of us yet not many notice its existence.