What is quad witching?

Quad witching refers to the occurrence of four major financial derivatives contracts expiring on the same day. These contracts include stock index futures, stock index options, stock options, and single stock futures.

Quad witching typically occurs on the third Friday of March, June, September, and December. It is considered a significant event in the financial markets because it can lead to increased volatility and trading volumes as investors and traders adjust their positions to manage their risk exposure.

The simultaneous expiration of these contracts can lead to large fluctuations in stock prices, as market participants rush to close out their positions. This can create opportunities for investors looking to take advantage of short-term price movements.

Overall, quad witching is a key event that traders and investors closely monitor and prepare for, as it can impact the overall market sentiment and direction in the short term.