What Is Quadruple Witching? Triple Witching?

by Jordan Yerman | September 18, 2009 at 06:46 am

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Those following the markets today may see the terms quadruple witching and triple witching pop up today. So, what is triple witching? For those who don't know, triple witching is when stock index futures, stock index options and stock options expire. Quadruple witching is liek triple witching, only it also involves single stock futures. Triple and quadruple witching take place at the last trading hour on the third Friday of March, June, September, and December. Sometimes it's referred to as Freaky Friday. On a triple witching day, stock prices can either jump up suddenly or drop downward just as quickly.

There were chaotic scenes in September 2002 when the Stock Exchange had its busiest day in years. The Footsie swung 300pts in minutes after a 'fat-fingered' trader mistakenly pressed the wrong button. A record 1.2bn shares changed hands in 20 minutes.

If you're a long-term investor, you shouldn't be too worried about triple witching.