What Is Quadruple Witching?
Quadruple 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.
The last hour of these trading days (between 3:00 to 4:00 p.m. EST) is referred to as the quadruple witching hour.
On quadruple witching days – and especially during quadruple witching hours – it’s common for investors to try and unwind their futures and options positions before the contracts expire. This often includes repurchasing contracts and closing out position market capitalizations.
2020 & 2021 Quadruple Witching Dates
Quad witching dates for 2020 were:
March 20, 2020
June 19, 2020
September 18, 2020
December 18, 2020
Quad witching dates for 2021 are:
March 19, 2021
June 18, 2021
September 17, 2021
December 17, 2021
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, investors can anticipate and plan for the potential effects of these relatively turbulent trading days.