Investing.com -- Wall Street is preparing for the largest March options expiration on record, with $5.7 trillion in notional contracts set to expire on Friday, according to Citigroup Inc. data dating back to 1996.

The quarterly event, known as "triple-witching," includes $4.1 trillion in index contracts, $772 billion in exchange-traded funds, and $875 billion in single-stock options. The expiration forces traders to close, roll, or rebalance positions, often triggering abrupt price swings as large pools of derivatives exposure disappear.

The expiration arrives as markets navigate turbulence from the Mideast conflict. Bets on Federal Reserve interest-rate cuts have faded as the Iran war sparked a rally in crude prices and raised inflation concerns.

The S&P 500 Index is about 6% below its January record, but the Cboe Volatility Index, a gauge of expected equity swings, remains well above its six-month average.