Witching Hour


DEFINITION of 'Witching Hour'

The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled by large professional traders, program traders and large institutional traders, and can be characterized by higher-than-average volatility.

BREAKING DOWN 'Witching Hour'

The witching hour is most commonly known in the context of triple witching, which is the third Friday of every quarter, when stock index options, stock options and stock index futures expire and roll to the next series. The last hour of these Fridays can be very volatile as positions are adjusted or closed out in anticipation of expiration. Since single stock index options now expire on the same day, triple witching and quadruple witching are used somewhat interchangeably.

  1. Double Witching

    Similar to triple witching, but instead of three classes of options ...
  2. Triple Witching

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

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

    A financial derivative that gives the holder the right, but not ...
  5. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  6. Quadruple Witching

    The expiration date of various stock index futures, stock index ...
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