Professional investors behind ‘witching day’ options spike

Retail investors are the losers from anomaly that costs more than $3.8 billion

Researchers have added fuel to controversial claims made last year that equity index options may be subject to market manipulation. 

The fresh analysis, which builds on work done by the same team in 2023, shows that professional investors benefit from a pricing anomaly in S&P 500 index options that costs retail investors more than $3.8 billion a year. 

A study last September flagged an upwards jump in option prices on so-called witching days – the third Friday of the month, when many options