CNBC Stock Blog

Profiting from This Volatile Options Expiration Week: Analyst

Friday marks the monthly expiration of November options, at time when markets can be especially volatile. So how can investors benefit from the volatility? Richard Sparks, senior equities analyst at Schaeffer’s Investment Research, shared his insights.

Bullish Bias on Expiration Week

“Generally speaking, options expiration, especially since 2000, [signals] a positive up-week,” Sparks told CNBC.

“[So] you want to play it to the upside.”

Sparks said that in seven of the last 12 expiration weeks, market action has been positive and he is leaning toward the positive side.

“If you have an expiration week that is a down week…they are very big,” he said.

“Last November’s expiration week, we were down 8 percent in the midst of the market crash. So they can be very volatile—so when you have a down week, you’d better watch out.”

Sparks said he likes the technology and retail sectors.

“You want to stick with the stocks and sectors that have performed well," he said. "Expiration weeks tend to exaggerate moves and so if we have an up-week, those stocks that have done well should have a better week than the overall market.”

Sparks Likes:


Polo Ralph Lauren

  • See Sparks' Last Appearance on CNBC (Nov. 6 2009)

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Sparks does not own shares of EXPE or RL.