Quad Witching

Quad Witching is Tomorrow

What Is Quadruple Witching?

Quadruple witching (also called “quad witching”) refers to the third Friday of every March, June, September and December. On these days, derivatives (e.g. market index futures, options futures, stock options, stock futures) expire, usually resulting in increased volatility.

How Does Quadruple Witching Work?

Although futures and options generally expire on the third Friday of every month, quadruple witching only occurs four times per year. On quadruple witching days – and especially during quadruple witching hours – it’s common for traders to try and unwind their futures and options positions before the contracts expire. This often includes repurchasing contracts and closing out position market positions.

Why Is Quadruple Witching Important?

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

Few things to note:

Quad witching is a gamma based day.

The largest amount of contracts expire this day, bringing into affect max pain at it’s finest. Market makers will shoot for pinning a stock at the point the most money will expire useless (call and put contracts). You can see wild swings based on gamma hedging and how options flow is coming in and going out this day.

These days recently have created Doji’s on the daily with swings in both directions, and commonly end red or even.
The last 15 minutes of trading is usually action packed with final moves being mad