The Impact of Option Expirations on Stock Prices

Robert C. Klemkosky

Journal of Financial and Quantitative Analysis, 1978, vol. 13, issue 3, 507-518

Abstract: One of the innovative and successful new markets developed in recent years has been the registered exchange for the trading of option contracts. Key innovations provided by the option exchanges include the standardization of some contractual terms and the creation of a central clearing corporation to serve as issuer and obligor of each option contract, thus severing the contractual link between a specific option writer and buyer. These changes have facilitated the trading of existing call options in the secondary market and have provided increased liquidity, continuous public reporting of prices, better information on trading volume and open positions, and reduced transaction costs.

Date: 1978
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