From a more psychological standpoint, humans are naturally lazy and gravitate towards entropy. A retail investor may use a large round number as a cognitive reference point; more or less a ‘psychological stop’ or ‘buy point’ that is easy to remember. This level may or may not have any fundamental or technical significance, but perhaps it is used because we find comfort in easy mathematics. There are probably multiple HFT algos (high frequency trading algorithms) hunting stops and orders at large round numbers like $500, but I digress.
What is the trade on large round numbers and what may cause these large round numbers to eerily occur on Fridays? The answer is pin risk from the derivatives market.
On the third Friday of September 2012, or 09/21/12, AAPL made its all-time high of $705.07. This was interestingly enough options expiration too. Shares were up early in the day, but came back down to close at $700.10! During September of 2011, a similar analysis was done, because AAPL was a mere 1% away from a new ATH too. Lone behold on that expiration Friday AAPL pinned right on $400. (Not to mentions last week’s close of $500 too!)
In September of 2010 AAPL pinned directly equidistant from the $270 and $280 strike. Then in September 2009 AAPL pinned right on $185. It seems as though AAPL likes to pin at large numbers. This could only potentially get stronger, because traders and investors have flocked in herds to AAPL options to speculate and hedge.
A trade off of this could be butterflies or calendars; with short strikes at the large round number of interest. The maximum profit zone for these trades is always at the short strike.