DIA - Quadruple Witching: Could Volatile Trading Spook Markets Friday? | Benzinga
Although Halloween is six weeks past, the witches are out on Friday. It’s quadruple witching day in the markets, when the expiry of a number of derivatives contracts can have an unnerving impact on trading.
Quadruple witching is the simultaneous expiry of stock options, index futures, index futures options and single stock futures contracts. The last of these hasn’t traded in the U.S. since 2020, so it’s now more accurately triple witching.
The event occurs quarterly on the third Fridays in March, June, September and December and can cause abnormal trading volumes and market volatility as derivatives traders rush to close out their contracts — often involving the purchases of large volumes of stocks to cover contract positions.
On Friday, just one hour after the market open, trading volume on the Dow was already nearly half of that of the previous session’s total — and Thursday’s total saw the largest volume of trade on the Dow since mid-September.
The SPDR Dow Jones ...