After two months of relative bliss, options traders may be kicking themselves for decrying a market with little volatility.

Today, broad market volatility increased, and spurred by the impending triple-witching expiration of equity and index options along with stock index futures, so did options prices.

Michael Schwartz,

CIBC World Markets'

options strategist, said an abbreviated month of September could likely make the market volatile in the next two weeks. Because options expire the third Friday of every month and September's first Friday was Sept. 1, the options have a shorter life span. Add to that the Labor Day holiday, and that tightened cycle forces more traders into action than usual.

Schwartz said the open interest -- the number of contracts outstanding or in existence -- in

S&P 500

futures that expire in December not exceeds the open interest of the September contracts. That shows that traders have moved quickly to roll index futures and options positions into their next expiration month.

When traders do that, however, they buy and sell underlying stocks related to their futures and options holdings, creating more than the usual volatility in the market. And because volatility -- reflected generally in the price of options contracts -- has been low, investors have sought to buy options.

To them, the spike in volatility makes their options worth more. That's good. "The short month has definitely contributed to volatility. Investors who bought options based on volatility are getting a little play for their money," Schwartz said.

As the

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Nasdaq Composite Index

slipped almost 100 points in early trading Friday, options traders were playing in the

Nasdaq 100

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unit trust put options that expire Sept. 15.

They were either closing out their September positions at a gain -- worried that any strength in the Nasdaq market next week would eat away at those positions -- or were buying some very short-term protection to get them through the next five trading days.

With the QQQ off 2.25 to 95.88, The September 94 and 95 puts got some attention. The September 94 puts traded 1700 contracts and jumped 11/16 ($68.75) to 1 7/16 ($143.75) and the 95 puts' volume hit 2000 and also rose 11/16 ($68.75) to 1 5/8 ($162.50).

Traders who chased rumors of a


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antitrust development on Thursday saw the value of their call options deflate on Friday.

The September 70 calls, which got very busy Thursday morning on rumors of a meeting between Microsoft and the government regarding its antitrust charges, fell 1/2 ($50) to 1 3/16 ($118.75). The September 75 calls also fell in price, 1/16 ($6.25) to 1/4 ($25) for 1678.