Postexpiration always leaves you with a hangover. I have written about this phenomenon before. It was exacerbated this morning by massive put-buying on the NDX as well as concerted shorting of all tech. (That could stem from the DLJ tech call, which was very negative for personal computers.)

The overall perception is one of danger and weakness. The combination makes the market seem heavier than it is.

It is now 11 a.m., traditionally the time I find the market begins to get its bearings after expiration.

Why is there a hangover? It has to do with the way options work. Let's say you exercised your


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March 170 calls Friday with the stock going out at 171. You basically have a free call on Monday to whether you want to hold on to Microsoft. You can kick it out Monday morning or you can hold on to it and send in the money to cover the cost of the buy.

That's why, even though there was plenty of positive news about Soft, there were still people who had to liquidate it because they exercised calls and couldn't or didn't want to pay.

On the Mondays after expiration, this dynamic occurs all over the Street as brokers scramble to contact their customers and customers scramble to sell stocks that they don't have the capital for.

Of course, there could be plenty of situations where people come in short and have to buy. But there are many more call buyers than put buyers, so there is much more stock that has to be sold on Monday than bought.

Hence the hangover.

James J. Cramer is manager of a hedge fund and co-founder of At the time of publication the fund was long Microsoft, though positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column by sending an email to