OPEX Week Playbook: What Magnetizes Price Into Friday Close

OPEX week — the week containing the third Friday of every month — is when monthly options expire. Open interest concentrations that have built up over weeks suddenly demand resolution. The mechanical forces that govern price behavior in that final 48-72 hours are some of the most predictable in markets. They're also some of the most consistently mis-traded.

The Magnet Strike

Look at SPY's GEX heatmap on any OPEX-week Thursday. One strike will stand out — the bar with the largest absolute gamma exposure. This is the Magnet Strike: the price level where dealers have the heaviest hedging obligation per unit of price movement.

As Friday close approaches, dealer hedging behavior intensifies. To stay delta-neutral, market makers must buy when price drops (selling their long call hedges) and sell when price rises (covering their short call exposure). This constant rebalancing creates mechanical pressure pulling spot toward the Magnet Strike. The closer to close, the stronger the pull.

Why the pin actually happens

Three conditions converge in OPEX week:

1. Open interest concentrations are maximal. Months of positioning have piled up at round-number strikes (e.g., $440, $450). These walls don't move.
2. Gamma per contract is highest near expiration. The same OI carries 10x the hedging weight on Friday morning that it did Monday morning. Dealers must hedge more frequently and more aggressively.
3. Realized vol on OPEX-week Fridays is statistically lower than on non-OPEX Fridays. Dealers' hedging is mean-reverting by construction.

Structures that capture the pin

Three trades work in OPEX week. Each has a different risk-reward profile.

• Long butterfly centered on the Magnet Strike — placed Thursday afternoon for Friday close. Pays 5-15x debit when the pin works, $0 when it doesn't. Size small (this is explicitly a high-conviction lottery ticket).
• Iron condor with wings outside major OI walls — sells premium that decays cleanly under the mechanical pin. Wider risk-to-reward, higher win rate.
• Single-sided credit spread against a known call or put wall — sell against the strike with the largest dealer exposure on the side of your directional read.

When the pin breaks

The pin doesn't always hold. Two scenarios break it:

1. Macro catalyst lands during OPEX week. CPI, FOMC, NFP — any large event will overpower the mechanical pin. Check the macro calendar Sunday night.
2. Spot is already below the gamma flip on Thursday. In negative-gamma regimes dealers amplify moves instead of dampening them. The "pin" can break in either direction by 1-3%.

The full operator's OPEX checklist

1. Monday: check SPY's gamma flip level and the top 3 magnet strikes
2. Wednesday: re-check — has the largest OI shifted as expiration approaches?
3. Thursday afternoon: pick your structure based on spot vs flip and conviction level
4. Friday morning: monitor for unusual flow that could disrupt the pin
5. Friday close: take profit aggressively on butterflies (don't hold past 3:45 PM)