Why September OpEx Could Be Very Bullish For Stocks

Next week is options expiration week. From here on out, I’ll just call it September OpEx. Last month, I took a closer look at August OpEx and today I’ll look at what September OpEx has historically done.

I’ve long noted how this week tends to go with the overall trend, only it is more magnified. For this reason some of the best weeks the past five years have taken place during OpEx. The flipside is the biggest drops in 2008 seemed to always take place during these weeks.

My theory for why this week is more volatile is because there are so many trades expiring, being rolled, or being closed in a short amount of time – you have many different moving parts amid huge volume that any news can exaggerate the moves. The bottom line is these weeks tend to see more volatility.

As I noted at the start of the month, September has been one of the weaker months no matter how you break it down. But wouldn’t you know it, September OpEx is actually the strongest out of any month? Ha, gotta love how the market likes to keep it confusing. Here are the returns since 2004.

Sign up for our FREE newsletter
and receive our best trading ideas and research



september opex historical returns

 

Here are those returns for September OpEx over the past 10 years. Pretty impressive.

september opex performance since 2004

 

Lastly, OpEx in general has been a very strong week over the past 12 months. Up nine times for a very solid +1.21% average return. Even more impressive is the past six months. It was up five times there and four of those times were up more than 1%. Plus, the one time it was actually down over the past six months was for a whopping -0.03% loss in May.

opex returns by month

 

So the bottom line is this. OpEx has been very strong the past six months and September OpEx has been the strongest out of all the months over the past 10 years. Next week could be a good one for the bulls I’d have to say.

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.