Nasdaq wins Best Options Trading Venue and Best Trading Technology Client Services at the Fund Technology and WSL Awards, February 14, 2017.

Now trading on our world-renowned INET technology.

Delays in last sale prices can result in missed opportunities and lost profits. In the stock market, timing is everything.

See How Commodities are Trading Today

Industry leaders, cyber experts, and policymakers joined the NCSA & Nasdaq to discuss the latest cybersecurity topics.

.
Trade

TradeTalks: Is Quad Witching Spooky? .

The quad witch occurs on the third Friday of March, June, September and December and is a busy day for traders. Is the quad witch scary?

TradeTalks: Is Quad Witching Spooky?

By Jill Malandrino / Global Markets Reporter

The third Friday of the last month of the quarter is a busy day for traders as it is “quad witch” options expiration. This event occurs on the third Friday of March, June, September and December. The four legs of the quad witch include; equity options, index options, index futures and single-stock futures.

“Traditionally, quad witching expirations are some of the busiest days in terms of volume, especially the June expiration because of the other index rebalances.” Chris Dearborn, Managing Director of the Markets Intelligence Desk at Nasdaq. “This doesn’t necessarily mean that the markets see more volatility as quad witch is more of a liquidity factor.”

The last hour of the trading session is referred to as the “quad witching hour” as traders attempt to unwind their futures and options positions before they expire, and, frequently, new contracts are purchased to replace the closed ones. The combined effects of exercise, delivery, hedging and arbitrage and the effect to the underlying security significantly boosts volume and some volatility. Hence, the term “witching hour” because of the market forces at work.

“The big trades to watch are the closing blocks that go off at 4pm ET because that is where traders will see four to five times the amount of average daily volume,” Dearborn explains. “But, for the average retail investor, quad witch is nothing to get spooked about as it doesn’t impact your overall portfolio.”

Follow Nasdaq on Facebook and Twitter: @Nasdaq

Follow Jill Malandrino on Facebook and Twitter: @JillMalandrino


Nasdaq® is a registered trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED. © 2017. Nasdaq, Inc. All Rights Reserved.
Recent posts{{catTitle ? " in " + catTitle : ""}}
{{post.Date | date:'MMM d'}}
Scroll up