December corn options on the Chicago Board of Trade expired quietly on Friday after the December futures contract settled at $4.22-1/4 per bushel, skirting large open interest at the $4.20 and $4.30 strikes. Early in the week, December corn futures dipped to a three-year low at $4.10-3/4 and seemed headed lower, threatening the $4.00 options strike, where more than 70,000 put options remained open.
Corn futures rallied by midweek on a mix of technical buying and supportive US export sales data, pushing the $4.00 strike out of play. But traders on Friday eyed the $4.20 strike, which had nearly 24,000 puts and 6,500 calls open ahead of the trading session. "We thought there might be something, but once corn rallied up to $4.22-1/4, no big deal. It was a teaser," said Virginia McGathey, president of McGathey Commodities.
When a futures contract "pins" a strike price on the day of options expiration, options sellers worry that options at that strike might be exercised, leaving them with an unwanted futures position. That can add to market volatility when the CBOT reopens on Sunday night.