Opex trading focuses on the market dynamics that emerge around options expiration—when contracts settle and hedges adjust.

Opex trading focuses on the market dynamics that emerge around options expiration—when contracts settle and hedges adjust. On monthly and quarterly expiration days, dealers rebalance, open interest unwinds, and liquidity pockets can create sharp, time-specific moves. Understanding gamma effects, pinning near key strikes, and the intraday schedule (open, midday, and power hour) helps traders anticipate volatility clusters rather than chase them. Common approaches include fading overstretched moves into high open interest strikes, using defined-risk spreads (iron condors, butterflies) to target pin risk, or deploying calendars to capture time decay while limiting event risk. Preparation matters: map key strikes and levels, track options flow and dealer positioning, and set scenarios for both expansion and compression. Equally important is risk management—use position sizing, stop protocols, and clear invalidation levels to avoid getting caught in late-day whipsaws. Whether you day trade indexes or hedge portfolios, a rules-based opex playbook can turn expiration into an opportunity instead of a surprise.

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