The GraveYard Shift

[JD400]

Friday is quadruple witching day.

Known to traders simply as “quad witch”, it falls on the third Friday of the last month of every quarter. It refers to the simultaneous quarterly expiration of four sets of options: individual stock options, stock futures, stock indexes and stock index futures.

With so many market forces at work at the same time, quadruple witching days have built up a reputation for greater volumes and volatility.

Let’s break it down. The quadruple refers to four stock agreements that all expire:

Stock index futures (buying/selling stocks on a future day)
Stock index options (the right to buy/sell a stock on financial indexes, like the Dow, for a certain period)
Stock options
Single stock futures (trading stocks in the future at a price agreed-upon today)

All four types of financial agreement expire on the same day, the third Fridays of March, June, September. and December.


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