Please see the red phrase below. Guide to Option Pinning at Options Expiration | Investing With Options

What Have Weekly Options Done To Pinning?

That's a great question for a graduate student to cover in a thesis paper. I don't have any hard numbers, but I'll give my thoughts based on watching the market on opex this year.

The introduction of weekly options into many pinning candidates has a very specific effect. Those traders looking to take positions in the short term no longer have to use the front month options. This lead to $\color{red}{\text{near term order flow to be distributed}}$  across short term options, which has led to decreased open interest on the monthly options going into expiration.

So what do you think would happen here? Sure, the pinning effect should be reduced during monthly options expiration, and I think it has.

But, much to my surprise, there has been a pickup in pinning effects in the weekly options. I don't know if this is quantifiably true, but the way that some of these weekly options trade on Friday lead me to believe that there may be a resurgence in the dark art.


1 Answer 1


It just means market participants who trade short term option now trade several different weekly options together with the front month monthly option rather than only the front month option.


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