A $2 Trillion Stock-Options Deadline Is Make-Or-Break Moment for Bulls

With August shaping up to be the calmest month this year for US stocks, traders are closely watching Friday’s $2 trillion options expiration for hints whether the tranquility will last.

At issue is the belief that derivatives markets have somehow played a key role in suppressing volatility, thereby compelling rules-based quant traders to buy shares and in turn luring a broader group of investors back into the market in order to chase gains.