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Derivatives are securities that derive their value from an underlying asset or benchmark, such as futures contracts, forwards, options, etc. Important moments for the futures market is the moment when derivates expire.
What is Quadruple witching?
Quad witching or quadruple witching day represents the third Friday of every March, June, September, and December when derivatives expire and the derivatives market resulting in increased volatility. Stock index futures, stock index options, stock options, and single stock futures expire simultaneously on quadruple watching dates. Quadruple witching only occurs four times per year.
What are quadruple witching hours?
Quadruple witching hours represent a period between 3:00 to 4:00 p.m. EST during the third Friday of every March, June, September, and December when derivatives expire.
Quadruple witching dates 2021 are:
- March 19, 2021
- June 18, 2021
- September 17, 2021
- December 17, 2021
How to trade quadruple witching?
To trade quadruple witching, you need to change your strategy and decrease risk in trading because volatility will increase during quadruple witching hours because traders close their positions.
In folklore, the witching hour or devil’s hour is a time of night, typically between 3 and 4 am. “Witching hour” means “bad luck,” This term got this name because all derivates expire simultaneously with high volatility.