Activity in the zero-day options space could have contributed to a late-day bout of selling around 3PM ET, according to Miller Value's John Spallanzani.
Zero-day to expirations expire on the same day that they are traded, and they give their owners the right but not the obligation to buy or sell the underlying asset at a set price.
Nearly a million options contracts on the S&P 500 are expiring on Wenesday with a strike price of $475, Spallanzani said on "Closing Bell.""Once we picked up $475, it seemed like the selling begot selling." he said.
He called the sudden decline"an air pocket." At its lowest point in the day, the S&P 500 dropped 1.23%, while the Dow Jones Industrial Average shed about 373 points, or 0.99%.
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