The last hour of these trading days, from 3PM to 4PM EST, is referred to as the "quadruple witching hour."
The term "triple witching hour" originated in 1980s
"Quadruple Witching" is a term that stock brokers use to refer to a day on which four major contracts - stock index futures, stock index options, stock options and single stock futures - all expire. Trading on these days is typically volatile, especially during the "Quadruple Witching Hour", which is the hour before the markets close (3 p.m. to 4 p.m. ET). Quadruple witching happens on the third Friday of March, June, September, and December.http://www.investopedia.com/terms/q/quadruplewitching.asp3
The reason that a quadruple witching day may have volatile trading conditions is that many investors want to unwind their interests in futures and options contracts prior to the contract expiration date. Stock trading increases as investors replace or repurchase existing contracts.http://web.streetauthority.com/terms/q/quadruple-witching.asp4
A Triple Witching date is an older version of the same occurrence, but without the inclusion of single stock futures expiring.
Quadruple Witching Investing Considerations
Active traders usually want to unwind and repurchase contracts before they expire. The effect of having 4 major types of contract expiring on the same day leads to increased activity on quadruple witching days. The markets on these days are characterized by increased trading volume, as well as increased volatility.http://web.streetauthority.com/terms/q/quadruple-witching.asp5 This creates both risks and opportunities for investors.
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A lot of volitle action actually happens 2 to 3 days in advance of the "witching" day you'll can see stocks swing wildly if their heavily shorted or heavily call bought.
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