Pinning the Strike
The tendency of a stock's price to close near the strike price of heavily traded options (in the same stock) as the expiration date nears. Investopedia Says:
This doesn't always happen, but it often does when there is significant open interest. For example, if a stock is trading near $50 and there is heavy trading in both puts and calls at this strike price, there is a tendency for the stock price to be "pinned" at $50 as traders unwind their positions at expiration. Related Terms:
Exercise Price
Expiration Date
Option
Strike Price |