The event, which forces traders to close, roll or rebalance positions, has long carried a reputation for triggering abrupt price swings as large pools of derivatives exposure suddenly vanish.

This quarter’s expiration arrives at a particularly fraught moment for markets, with bets on Federal Reserve interest-rate cuts fading as the Iran war has sparked a rally in crude prices and concerns over inflation. Hostilities continued on Thursday amid escalating attacks in the Persian Gulf on energy facilities.

While the S&P 500 Index is only about 6% below its January record, the Cboe Volatility Index — a key gauge of expected equity swings — is well above its six-month average, underscoring lingering investor angst.

Trading activity in options markets has surged in recent weeks, particularly in index and ETF contracts, both of which hit record notional volumes in March — about 9% above their year-to-date averages, according to Vishal Vivek, Citi’s director of equity and derivatives trading strategy.

In contrast, single-stock options volumes are roughly 3% below the level, a move partly attributed to waning retail participation and worries around geopolitical risks.

The scale of this week’s expiration is also notable relative to the broader market. At 8.4% of Russell 3000 Index market capitalization, it’s well above historical norms, amplifying the potential for positioning-driven flows.

Stocks including Regeneron Pharmaceuticals Inc., PDD Holdings Inc. and T. Rowe Price Group Inc. are among those seen as vulnerable to outsized moves during the session as they have large open interest in options that expire near the current prices, according to Citi.