Triple Witching

AAA

DEFINITION of 'Triple Witching'

An event that occurs when the contracts for stock index futures, stock index options and stock options all expire on the same day. Triple witching days happen four times a year on the third Friday of March, June, September and December.

This phenomenon is sometimes referred to as "freaky Friday".

INVESTOPEDIA EXPLAINS 'Triple Witching'

The final trading hour for that Friday is the hour known as triple witching. The markets are quite volatile in this final hour, as traders quickly offset their option/futures orders before the closing bell. If you are a long-term investor, triple witching will have a minimal impact on you.

RELATED TERMS
  1. Deferred Option Month

    The latter month or months of an option or futures contract. ...
  2. Closing Bell

    A bell that rings to signify the end of a trading session. The ...
  3. Index

    A statistical measure of change in an economy or a securities ...
  4. Index Futures

    A futures contract on a stock or financial index. For each index ...
  5. Index Option

    A financial derivative that gives the holder the right, but not ...
  6. Futures

    A financial contract obligating the buyer to purchase an asset ...
Related Articles
  1. Pin Down Stock Price With Real Options
    Investing Basics

    Pin Down Stock Price With Real Options

  2. Options Basics Tutorial
    Options & Futures

    Options Basics Tutorial

  3. Haunting Wall Street: The Halloween ...
    Options & Futures

    Haunting Wall Street: The Halloween ...

  4. Introduction To Weather Derivatives
    Options & Futures

    Introduction To Weather Derivatives

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center