Prepare for the “Quadruple Witching Day” Sep 17th..
Quadruple witching is a market event where several derivatives contracts expire on the same day.
The simultaneous expiration of all of these hedging products creates tons of order flow and repositioning, resulting in significant volatility and market whipsaws.
It’s called quad witching because these four types of contracts expire on the same day:
Equity Futures Contracts
Options on Individual Equities
Options Contracts on Equity Futures
Options on Equity Indexes
Because many large options positions either expire, are closed, rolled, or exercised, this can lead to abnormal market volatility and generally unpredictable price action.
Historically, the volume and volatility have picked up in the last hour of the New York session, often referred to as “quad witching hour,” a reference to the idea in folklore that there’s a specific period of night where witches appear and black magic is most effective.
via r/wallstreetbets https://ift.tt/3qhG8Zq
September 14, 2021 at 03:10PM