Quadruple Witching


DEFINITION of 'Quadruple Witching'

The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock options contracts expire on the third Friday of each month and once every quarter - on the third Friday of March, June, September and December - all four asset classes expire on the same day. Because futures and options investors must close out of their positions on those days, they often witness increased trading volume.

BREAKING DOWN 'Quadruple Witching'

The term "witching" comes from the fact that in the past, the expiration of futures and options contracts occurred not only on the same day, but at the same time. This often resulted in a period of greater-than-normal market volatility, which became known as the "witching hour." Due to this increased volatility and frenzied market activity, many investors approach the markets differently on witching days.

  1. Option

    A financial derivative that represents a contract sold by one ...
  2. Double Witching

    Similar to triple witching, but instead of three classes of options ...
  3. Index

    A statistical measure of change in an economy or a securities ...
  4. Triple Witching

    An event that occurs when the contracts for stock index futures, ...
  5. Futures

    A financial contract obligating the buyer to purchase an asset ...
  6. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
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  2. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  3. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
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