Good Friday Expiration Week – Trading Holiday

This Friday, April 18th is the 3rd Friday of April.  It’s Good Friday, so April (regular) Expiration this week will be on Thursday April 17th.  Equities (stocks) will settle at the close of trading Thursday.  AM Settlement April options (e.g. SPX) settle on the opening Thursday, so the last day to trade those will be tomorrow afternoon, Wednesday April 20th.   CFE, C2 and CBSX will be closed as well.

The NYSE has been open for trading on three Good Friday’s, in 1898, 1906 and 1907.  Each of those years had an unusual reason for having the markets stay open.  The closing on Good Friday goes back to at least 1864.  Records on whether the exchange stayed open are not readily available before then, but it could go back to 1793.

So why is there no trading on Good Friday?  Best guess is lack of interest in trading that day.  Good Friday is a trading holiday in many European markets, and it being the holiest week in Christianity and many times coinciding with Passover week, probably not much would be trading.  Not many objections from traders in the Northern Hemisphere it being a Friday in mid-spring.

This brings up the question – “Why do options expire the third Friday of the month?”   I hear it was to keep away from the fixed Holidays and holidays that wouldn’t land in the third week, July 4th, Memorial Day, Labor Day, Washington’s Birthday (Feb 22), etc.  Can’t hide from Easter.  It’s the first Sunday after the first full moon after the vernal equinox.  That narrows it down to about a six-week range!

So Markets closed this Friday, Expiration moved up one day. Next scheduled trading holiday is Memorial Day, Monday, May 26th.

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Marty Kearney

Mr. Kearney began his long association with the CBOE when he became an independent Market Maker in early 1981. Mr. Kearney traded options full time on the trading floor until 1992 and periodically thereafter until 1996. In early 1992 he became a founding partner and Registered Options Principal of a brokerage firm based in…