Something unprecedented just happened in the options market, and it’s flying under the radar. On February 3rd and 4th, 55 of the 506 large-cap stocks tracked by Prospero.AI suddenly lost all options beyond nine months. That means 11% of major stocks had their long-term options disappear overnight, marking a significant and alarming shift in institutional risk management.
Typically, when options approach expiration, financial institutions roll out new long-term contracts to maintain market stability. This time, that process has completely stopped for a subset of stocks. No new options have been issued for 2026—not even for massive firms like Marsh & McLennan, Parker-Hannifin, and Motorola, which have historically always had long-term options available.
“This is one of the most insane things I’ve ever seen in the markets. When a user first brought this to our attention, the changes in the stocks we covered were so shocking we thought it was an error in our code. When 11% of large-cap stocks suddenly have no options past nine months, it’s not a blip—it’s a massive institutional red flag,” says George Kailas, CEO at Prospero.AI. “Banks are effectively saying, ‘We have no idea how to price risk beyond the short term,’ and that should terrify everyone paying attention.”
A Dramatic Shift in Risk Appetite
Further analysis confirms that institutional risk appetite isn’t just declining—it’s falling off a cliff. A closer look at the data reveals stark discrepancies:
- As of January 24th, 99.67% of large-cap stocks that had long-term options (320+ days to expiration) still had them on February 5th.
- However, 11% of large-cap stocks in Prospero.AI’s dataset—55 major companies—lost all options over the past nine months at the same time.
- This kind of simultaneous disappearance of long-term options is not normal. While some have suggested this could be a routine market occurrence, historical data simply does not support that claim.
- Notably, Marsh & McLennan, Parker-Hannifin, and Motorola, companies that consistently had long-term options available, still do not have any beyond December 19, 2025.
The disappearance of long-term options across a targeted set of stocks suggests that financial institutions are either unwilling or unable to price risk beyond 2025. That’s a major warning signal for the broader market.
Two Possible Explanations—Both Concerning
This shift suggests one of two alarming possibilities:
- Risk models are failing to provide reliable pricing. Geopolitical tensions, inflation uncertainty, and tariff changes may be introducing such extreme pricing variations that institutions cannot issue long-term contracts with confidence.
- Risk management is rejecting the results. If models are working but flagging significant risks, institutions’ risk teams may be blocking the issuance of long-term options due to concerns over economic or market stability.
“Long-term options on large-cap companies tend to have ongoing interest from various institutions to originate. But that has disappeared for a lot of stocks simultaneously. That points to one of two things: either the models under different assumptions with tariffs, conflict and their impact on things like inflation are producing such a wide range of results institutions are unable to price them. Or they produce results for pricing that risk management departments aren’t approving of. If institutions that function in all types of environments are gun shy to originate past nine months on large-cap stocks, that should concern everyone,” Kailas explains.
What This Means for Investors
For investors, this is a massive red flag. The lack of long-term options availability means that major financial institutions are not confident in pricing risk beyond 2025. If banks—who have access to extensive risk modeling and historical data—are unwilling to commit to long-term options, that suggests serious underlying instability.
“I’ve been working in finance for two decades and I’ve never seen anything like this. Long-term options are vital to risk management practices that keep dollars in the market, and if institutions are walking away from that, what is already a highly volatile market could get very scary. Something big is brewing, and the silence around it is deafening,” Kailas warns.
This is precisely the kind of hidden market signal that mainstream coverage is missing—but investors need to be paying close attention. Whether this signals an impending financial crisis or a massive recalibration of risk models, one thing is clear: institutional confidence in long-term market stability is eroding fast.
