June 17 (Friday) is Quadruple Witching Day.
Quadruple witching day is the Friday of the third week of each quarter (March, June, September and December) when all financial derivatives in the U.S. stock market expire and make a settlement and delivery.
During the quadruple witching day, stock index futures, stock index options, individual stock futures and individual stock options expire at the same time. The last trading hour of the day is the Quadruple Witching Hour, which is from 3 to 4 p.m. New York time. During the expiration hours, trading volume increases sharply and market volatility increases.
During the last trading session of the Quadruple Witching Hour, investors rush to close their positions, resulting in a significant increase in trading volume. As a result, the Four Witching Days are usually accompanied by large swings in the prices of stocks and derivatives.
Usually, horse stocks are also volatile on the day of the Four Witching Days, especially when the market reopens at 4:50 p.m. There can be huge trading volume in blue chips or individual large caps. You should not be surprised if you see a sudden surge or plunge at the end of the day.
If you are an investor in horse stocks, you can also start laying out for the four witching days.
