Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Quadruple Witching

What it is:

Quadruple witching refers to the third Friday of every March, June, September and December. On these days, market index futures, market index options, stock options and stock futures expire, usually resulting in increased volatility.

How it works (Example):

Although futures and options generally share simultaneous expirations on the third Friday of every month, quadruple witching days only occur four times a year. The last hour of these trading days, from 3:00 to 4:00 p.m. EST, is referred to as the quadruple witching hour.

On quadruple witching days, and especially during quadruple witching hours, many investors attempt to unwind their futures and options positions before the contracts expire. This activity frequently includes repurchasing contracts and closing out position market capitalizations.

Why it Matters:

Quadruple witching days are usually accompanied by considerable volatility in stock and derivative prices, as well as increased trading volume. As a result, investors can anticipate and plan for the potential effects of these relatively turbulent trading days.

Related Terms View All
  • Life-Plus-Ten Option
    To understand how this works, let's assume you'd like to invest in an annuity that, after...
  • Realized Gain
    Let's assume you own 100 shares of Company XYZ that you purchased for $1,000. If the...
  • Initial Jobless Claims
    The data in the Initial Jobless Claims report reflect how many people filed for...
  • National Retail Federation (NRF)
    The NRF represents retailers in the United States and 45 countries. The retailers in the...
  • Tax-Exempt Sector
    Assume John Doe wants to lower his tax bill by investing in tax-exempt instruments....