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By 9:30 a.m. ET, the March contracts were gone. This isn’t just administrative cleanup — it’s a fundamental shift in market structure.
After 9:30 a.m., it’s all about the June contracts, which completely changes the positioning landscape.
This expiration creates what I call the Great Reset. All that complex hedging and gamma positioning influencing price action through the March contracts has disappeared.
You’re left with a cleaner slate but significantly more uncertainty. On a triple witching day like today, it’s a 50-50 coin toss once those contracts drop off and the tail stops wagging the dog.
Hedging In A High-Volatility Regime
Because the market becomes so directionless post-reset, precision in risk structure is everything.
Instead of broad index exposure, traders are looking at out-of-the-money (OTM) puts on the S&P 500 ETF (SPY) — specifically targeting the $650 or $645 strikes for the June monthly expiration.
With the SPX currently fighting to hold the 6,550 level, these tools give you defined downside protection against the “Warsh Shock” without tying up excessive capital.
Another way to handle this volatility is with wider spreads. Running $20-wide vertical spreads allows you to capture meaningful moves if the technical damage accelerates, while keeping your risk parameters strictly controlled.
When the tape gets chaotic after the roll, that kind of structure provides leverage on directional conviction without stepping into oversized risk.
Today’s Market Reality Check
We’ve seen significant technical damage recently. SPX options are pricing in a much tighter environment, and the big question for the afternoon is whether we can even reclaim 6,700.
Based on the current chart, that resistance looks like a heavy lift for the bulls.
As the market tries to catch a bid, the action is becoming fractured. We’re seeing a massive divergence thanks to the S&P rebalance. While large caps are under pressure, infrastructure and AI supply names like Vertiv (VRT) are seeing high-volume forced buying as they move into the benchmark.
Meanwhile, the Russell 2000 (RUT) has been bucking the trend, showing that offset behavior where small caps run on their own while the broader indices flounder.
The bottom line — triple witching creates opportunity, but today’s mix of geopolitical energy pressure and the “Warsh Rule” on liquidity adds a layer of instability we haven’t seen in years.
Use strategies that respect this volatility, size your positions for the Reset, and don’t assume the market is moving in unison. It’s a split tape — trade it like one.
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Geof Smith
Geof Smith TradingÂ
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
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Disclaimer: We develop strategies to the best of our ability, but we cannot guarantee a future return. There is always a risk of loss when trading. Past performance is not indicative of future results. Since 12/05/2024, the trading approach discussed today has published 54 trade alerts. All 54 have returned as winning trades, for a 100% win rate. The average return per trade, winners and losers combined, has been 16.88% on an average holding period of 9 days.
