Citadel Strategist Sees October 'Reload' After September Market Reset

A sharp slowdown in trading activity during September has created a "cleaner starting point" for U.S. stocks, potentially setting up an October rebound as key sources of market demand return, according to Scott Rubner, Citadel Securities’ head of equity and equity derivatives strategy.

In a note to clients, Rubner argued that the recent market pullback has cleared out crowded positions and lowered valuations, giving investors “considerably more capacity to rebuild exposure” in the fourth quarter.

Market Activity Cools Significantly

September marked a notable decline in market participation, which Rubner characterized as a necessary reset. He highlighted several key metrics indicating the slowdown:

• Cash-equity trading volumes fell to 0.94 times their trailing one-year average, the lowest reading of 2026.
• Retail options premium saw a similar drop, also falling to 0.94 times its one-year average.
• Overall stock activity is now 26% below its peak in June, while options premium has declined by roughly one-third from its June high.

This observation was echoed by strategists at JPMorgan Chase & Co. led by Arun Jain, who described September as the quietest month for cash-equity trading since December 2024. According to JPMorgan, equity flows last week ranked in just the 12th percentile.

October Catalysts on the Horizon

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Rubner sees a potential reversal driven by historical patterns and the corporate calendar. He noted that seasonality is a powerful factor, with trading volumes typically increasing from September to October.

Citing historical data, Rubner pointed out that cash-equity volumes have risen by an average of about 8% from September to October in each of the past four years. Options activity has followed a similar trend, increasing by an average of roughly 15% over the same period for the last three years.

This seasonal tailwind coincides with two significant market drivers: the start of the quarterly earnings season and the resumption of corporate share buybacks following pre-announcement blackout periods. These events could provide investors with fresh catalysts to deploy capital.

The Key Test for Q4

While Rubner acknowledged that October could remain volatile, he viewed the September sell-off not as a deterioration in fundamentals but as a “useful clearing event.” The central question now is whether the return of earnings news and buyback programs will be enough to lure investors back into the market.

A sustained increase in cash and options volumes would confirm the thesis that the September reset is translating into renewed demand. For Rubner, the market's direction hinges on this return of activity. "Q4 is the reload," he wrote.