When I got my first permanent job in finance, these were terms I came across very early on. Like triple witching, quadruple witching is the ending of contracts on the third Friday of every March, June, September, and December. I would have closed my short entirely by this stage, if I didn’t suspect that arrangements will have been made in advance of this event. You must login to post a comment or like an article. I've worked on the sell-side, at independent research houses, and on the buy-side as a portfolio manager for an insurance company. Keep an eye on it this week with stimulus plans, Fed policy, and quadruple witching. On the last quadruple witching day, in December 2020, approximately 750,000 shares were traded at the bell. It’s stock options, index options, and stock futures. Options expiration and triple witching hour calendar. Earlier this week, Charlie McElligott, a cross-asset strategist at Nomura Securities, said he expected S&P 500 futures to be stuck between 3,700 and 3,750, levels that correspond to two “big gamma strikes.” After the event, gamma-related equity exposure that’s linked to the S&P 500 could shrink by 38%, opening the door for a broad range of movement next week for the benchmark index, he said. And they had real significance, too: the day that the index futures contracts we had been monitoring came to their natural end. And of course the amount of speculative buying that has taken place is quite unprecedented, by new retail investors and traders looking for a short squeeze. “In other words, Friday is likely the last opportunity to make major portfolio shifts before the 2020 liquidity window closes.”. Cube UK Report (14 March 2021) - A string of positive updates! Looking at historical data found on Yahoo, it appears that GME experienced a bump on that particular day compared to earlier in the week: It just so happens that Dec. 18 is also an important day for traders in options and futures. All rights reserved. Quadruple Witching happens on the third Friday of every March, June, September and December. Sept. 18, 2020 8:25 am ET Order Reprints ... June, September and December. Today is a special day in the markets: “triple witching” or “quadruple witching”. This website is provided “as is” without any representations or warranties, express or implied. Quadruple witching happens just four times a year on the third Friday of March, June, September and December. Macroeconomic Policy in 40 Years, Erdogan Ousts Central-Bank Head, Installs Interest-Rate Ally, China Reshuffles Central Bank’s Monetary Policy Committee. More … I understood 5% of that but found it remarkably interesting nonetheless – good luck. Quadruple witching, occurs on the third Friday of the month of every quarter, in March, June, September, and December, and refers to the simultaneous expiration of single-stock options, single-stock futures, and stock-index options and stock-futures. While all the turbulence created headaches for traders, some market watchers viewed it as the final chance for investors to shuffle big holdings before liquidity thins out into Christmas and the New Year’s holidays. That’s a 60% increase and a $235 billion increase in market capitalisation. Stock market investor with a decade of experience as an analyst and fund manager. Why do traders care about quadruple witching? Cube UK Report (3 March 2021) – Eyeing up the FTSE, Tesla’s bitcoin purchase was crazy $TSLA $TSLAQ $BTC. I liked the mystery they conveyed. Financial market movements can be erratic on days when options and futures contracts expire. Joel’s Resource Report – copper powered cashflow #RMM. But if you look at the short interest published on Nasdaq.com, you see that “days to cover” has reduced to only around one, and the number of shares sold short (adjusted for the 5:1 split) is low, compared to the historical record of the stock. I’ll be monitoring events particularly closely today, checking to see if there is a liquidity squeeze or if the various ETFs and mutual funds have managed to prepare for this event already. The Two Women Fixing the Pipeline for Black Female Economist... Ramped Up ECB Buying Offers No Comfort for Reflation-Driven... Vice Is a Hard Habit to Kick as ESG Seeps Into Credit Market... Friday’s event seen as the last ‘liquidity window’ of 2020, Tesla’s S&P 500 addition added layer of uncertainty to the mix. Some will say that 2020 has … While trading activity rose Friday, the impact of quadruple witching on the market’s overall direction was not easy to predict. I liked the mystery they conveyed. “In other words, Friday is likely the last opportunity to make major portfolio shifts before the 2020 liquidity window closes.” Quadruple witching typically fuels trading as large derivatives positions roll over. U.K.’s Crisis Ground Zero Is Ready for Reconstruction: Eco W... Ghost of Horrific Treasury Auction Haunts Bond Market on Bri... Wall Street Pros From Goldman to JPMorgan on New Inflation E... First Negative-Yield Quote Causes Flutter in India Bond Mark... Summers Sees Worst U.S. By. . That happens on the third Fridays of March, June, September, and December. Investors are seeking quick profits via risky bets in a market in which the S&P 500 has rallied more than 10% this quarter amid hopes for a return to normal economic activity. (Getty Images) Double, double toil and trouble: It's quadruple witching … On Friday, S&P 500 futures closed at 3,726.25. And this is the perfect day for Tesla to be added to the S&P 500 index (at the close), as it enables funds to manage the event using the entire plethora of derivative tools at their disposal. © 2020 Cube Dot Investments Limited. Updates with market close data in the second paragraph. Jason DeBolt has not retired. And Tesla’s closing price today might be the most significant closing price for any stock, ever. Then, magically when new institutional holdings were reported in mid-February, Perspective Advisors had approximately 750,000 shares. The most recent quadruple witching day was June 19, and the next one will be on September 18. 6 min read Tomorrow is “Quadruple Witching” in the derivatives markets. That may sound like hocus pocus, but it actually describes a logical, if hectic, event. For the last few years, I've been building my private investment portfolio and my online assets. While spikes in volume usually occur around the open and close, providing windows of robust liquidity, large price swings can happen suddenly at any time of the day. The increase reflected continued call buying especially from day traders chasing single-stock upside, Murphy said. Bolstered by vaccine news and a clear-cut presidential election, stocks once ignored by investors, such as energy and small-caps, are coming back in vogue, replacing technology as market leaders. 3 Signs You’re the Toxic Person in Your Workplace (QuadWit ch/tkj) by John Boitnott at Inc #QuadrupleWitching. Updated September 30, 2020 What is Quadruple Witching? Economic calendars: Forexpros. 4:20. So, on those days, stock index futures, stock index options, stock options contracts, and single stock futures all expire. Before it's here, it's on the Bloomberg Terminal. Graham Neary December 18, 2020 9:20 am 1. Because three option classes expire all … Coinciding with the event was Tesla Inc.’s widely-watched inclusion in the S&P 500, a development that alone was estimated to force roughly $80 billion of stock trading. “In the institutional space, you began to see a bit more fundamental positioning, perhaps even away from some of those more technology-focused names and work-from-home type names that have had very large moves this year,” he said. Moderna’s Covid-19 vaccine endorsed by FDA advisory panel A Food and Drug Administration advisory panel on Thursday recommended that the regulator grant emergency use authorization for Moderna ( NASDAQ: MRNA )’s coronavirus vaccine. The website is not intended to address your particular requirements. The event occurs on the third Friday of the final month of the quarter, or in March, June, September and December, and typically brings increased volumes as … Today is quadruple witching day, so there will be some action as December options and futures contracts hit expiration. Retail investors have continued to be active in the single stock names, often trading call options on popular technology companies, while professional money managers are increasingly turning to sector exchange-traded funds to position for broader market gains, according to David Silber, head of institutional equity derivatives at Citadel Securities. December 17, 2020, 2:38 PM PST Updated on December 18, 2020, 2:24 PM PST. For a very long time – the past ten years or more – I would have told you … So investors have to deal with four quadruple witching days a year. On average, about 19 million call contracts have changed hands this quarter, a record high. When I got my first permanent job in finance, these were terms I came across very early on. Cube Dot Investments Limited makes no representations or warranties in relation to the information on this website. Today, 3 million shares were traded at the bell and after hours. “With a market exposed to many moving parts, the normally quiet holiday weeks may be punctuated by some fascinating aftereffects,” said Steve Sosnick, chief strategist at Interactive Brokers. “Upside calls on the Energy Select Sector SPDR Fund, for instance, have become popular, along with other sectors that might benefit from a change in administration, vaccine-driven economic reopenings and a continued low interest rate environment.”, Read more: Citadel Securities Trading Chief Sees Tesla Creating Risk in S&P. Cube UK Report (14 March 2021) – A string of positive updates! Other calendars: Holiday calendar - Options expiration. Quadruple witching refers to the once-a-quarter date when stock index futures, stock index options, stock options, and single stock futures expire.. $SO4 #SO4. Quadruple witching days occur four times every year, on the third Friday during the months of March, June, September, and December. In particular, the information on this website does not constitute any form of advice or recommendation and is not intended to be relied upon by users for investment decision-making purposes. , December 17, 2020… Quadruple witching day! For a very long time – the past ten years or more – I would have told you that it’s an archaic idea that the media rolls out once a quarter for an eye-catching headline, but that it … Closing this box will communicate your consent to this policy. There really isn’t anything to fear. Quadruple witching typically fuels trading as large derivatives positions roll over. One way to examine the event is through the lens of options dealers, who typically need to hedge their positions by buying or selling underlying stocks. On September 18, 2020, a quadruple witching day, equity transactions surged – 14 billion shares changed hands, representing approximately 40% above the three-month volume average. I’m lucky not to be one of them: I thankfully stood aside for most of the run-up, only getting back into the trade when the stock was approaching $400. About 16 billion shares changed hands, 53% above the average in the past three months, as the S&P 500 Index erased about two-thirds of its losses during the last 30 minutes of trading. Cookie Notice: This site uses Cookies to tailor your experience. In the financial markets, there is a special day called a quadruple witching day. 6-min read Tomorrow is “Quadruple Witching” in the derivatives markets. In a year that’s seen the market bombarded by wild swings and violent rotations, traders just got blasted by a surge of trading volume. The short shares reported on Citadel's balance sheet as of December 2020 were up 127% YOY The price of several heavily-shorted stocks has skyrocketed since Jan 2021 Citadel uses 'Fair Value' accounting and needs to reconcile the value of their short positions to this new market price. Transactions in stocks spiked amid a quarterly event known as quadruple witching, when options and futures on indexes and equities expire. The quadruple refers to four stock agreements that all expire: Stock index futures (buying/selling stocks on a future day) Stock index options (the right to buy/sell a stock on financial indexes, like … Quadruple witching usually occurs on the third Friday of March, June, September, and December, at market close (4:00 pm EST). Cube Midcap Report (12 Mar 2020) - The plunge continues #CCR #TRN…, Cube Midcap Report (9 March 2020) - Eye of the storm as…, Cube Midcap Report (20 March 2020) - Forward buying juices Ocado's result…, Joel’s Resource Report – Cosmetic Compounding #DVRG. Of course, bears have been saying that all the way up, and have lost money every time. CFA (Chartered Financial Analyst). On these days, market index futures, market index options, stock options and stock futures expire, usually resulting in increased volatility. This reflects the massive losses experienced by so many bears, and their forced departure from the market. So the short has never been more attractive than it is today, in my opinion. Cube Report (18 Dec) – A good argument against micro-caps, Joel’s Resource Report – the most successful placing machine on the market? Would have told you … quadruple witching, when options and stock futures expire... 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