Options Expiration Week Effect Strategy

Discover a strategy for US Options traders based on the 'Options Expiration Week Effect'. Buy at Monday's open in Opex week and sell on Friday's close.

Published · Updated · Methodology: Technical Indicators

Part of: Options Strategies

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: Daily
  • Markets: US Options

Source video

Decoded from: Options Expiration Week Trading Strategy #shorts by Quantified Strategies — watch the original

Key timestamps:

  • 0:00 - Introduction to Opex week
  • 0:12 - Entry rule: buy the Monday open
  • 0:15 - Exit rule: sell at the close of Opex day

Strategy overview

Options expiration week — the trading week that ends on the monthly third-Friday expiry — is one of the oldest calendar anomalies in equity research, studied because hedging flows, position rolls and pinning pressure cluster into a predictable annual set of dates. What makes this entry unusual for a strategy catalogue is that there is nothing on the chart to read: the setup is defined by the calendar rather than by a level, a pattern or an indicator, and the word "options" here names the window, not the instrument being traded.

The source is a #shorts clip from Quantified Strategies, a channel whose whole editorial premise is backtested, rule-based anomalies rather than discretionary chart commentary. That format is the story: a seasonal effect that would normally arrive wrapped in decades of data, sample counts and caveats is compressed into a handful of seconds on daily bars, stated as a plain calendar instruction. Viewers get the shape of the idea immediately and none of the evidence behind it — which is exactly the trade-off short-form quant content makes.

No rule set was extracted for this entry, so this page does not carry a decoded breakdown. If you want to work with the concept, the honest place to start is the arithmetic of testing it: an expiration-week effect offers roughly twelve observations per year, so even a long history is a small sample, and calendar anomalies are the category most prone to fading once they are widely published. Treat the daily timeframe and the monthly cadence as the two constraints that shape any test you build.

Topics

options expiration week effect · options trading strategy · us options · daily trading · technical indicators · trading strategy · swing trading · monthly options strategy · tradingview strategy · pine script

Frequently asked questions

What is the options expiration week effect?

It is a calendar anomaly: the observation that equity index returns during the week ending in the monthly options expiry have historically behaved differently from an average week, generally attributed to hedging flows, option position rolls and dealer rebalancing concentrating around expiry.

Does this strategy mean trading options contracts?

Not necessarily. The options calendar defines the window, but effects of this kind are typically studied and expressed on the underlying index or stock on daily bars. The options market supplies the timing mechanism, not the instrument.

When exactly is options expiration week?

For US markets it is the week containing the third Friday of the month, when standard monthly equity and index options expire. Four of those — March, June, September and December — coincide with index futures and index option expiries as well, the sessions commonly called quadruple witching.

How should I evaluate a calendar-based strategy like this one?

Backtest it over as many years as your data allows and count the observations, not the days — roughly twelve per year means a decade of history is still a small sample. Check whether the effect holds across different market regimes and in recent years specifically, since published anomalies often weaken. Strategy Decoder catalogues strategies extracted from video sources so you can compare approaches like this before committing to a test.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

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