In folklore, the witching hour midnight, when supernatural beings are said to roam the earth, brought havoc and bad luck to those unfortunate enough to encounter them.

What Is Quadruple Witching?

Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. While stock options contracts and index options expire on the third Friday of every month, all four asset classes expire simultaneously on the third Friday of March, June, September, and December.

Quadruple Witching days, also known as Quad Witching, are the four days in a year where the combined effects of derivative traders exercising their in the money options and taking delivery on their futures contracts as well as traders practicing arbitrage made Quad Witching one of the most turbulent and heavily traded days of the year. Quad witching is one of the most important days to take note of in options trading.

19 March 2021

Market Impact from Quadruple Witching

Following the week of quadruple witching, the market indices such as the S&P 500 tend to decline, perhaps due to exhausting the near-term demand for stocks.

Quadruple witching days witness heavy trading volume, in part, due to the offsetting of existing futures and options contracts that are profitable

While it may result in increased volume and arbitrage opportunities, quadruple witching does not necessarily translate to increased volatility in the markets.

When does quadruple witching occur?

Quadruple witching usually occurs on the third Friday of March, June, September, and December, at market close (4:00 pm EST). A link for calendar for 2021

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