Talk:Triple witching hour

What is the background behind having all of such contracts expire at the same time? What is the history behind it? It seems somewhat arbitrary, so there must be a tradition or market standard? Thx. Furrypop 09:17, 15 June 2007 (UTC)

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BetacommandBot 11:36, 6 July 2007 (UTC)

"Freaky Friday"

The article had a reference to this. On Talk:Freaky Friday (stock markets), the consensus was that this term in not used to reference to the Triple witching hour. Please have a relevant citation if you want to add it back. patsw 01:40, 3 October 2007 (UTC)

Triple witching day

Since there's no "triple witching day" entry, why not change the title of this page to "triple witching day" and mention in the article that the TW hour is the last hour of that day? This article seems to be detailed enough. (unsigned)

It is my impression that "Triple witching hour" is the more common term. In any case, there once was a "triple witching day" article, but it was a cut-and-paste from an investment glossary so it got deleted as copyright violation. I created a redirect to here, since apparently at least some folks refer to it as a day rather than an hour. --Jaysweet 13:10, 1 November 2007 (UTC)

I've seen "hour" always and everywhere, "day" never and nowhere. But a redirect at "triple witching day" is worth it. Some sources define it as the day when triple wishing hour occurs. Emphasizing, quite rightly, the hour when the volatility occurs. "Day" has about half the hits of "hour." —Preceding unsigned comment added by 64.105.0.217 (talk) 18:32, 15 August 2009 (UTC)

"Macbeth" as origin

The suggested origin of this from "Macbeth" needs a citation. The obvious reason for triple is that three classes of securities expire -- one doesn't need to drag in Shakespeare to explain its origin. That makes it dubious to me. The text will be deleted if a citation is not provided. patsw (talk) 13:44, 21 December 2007 (UTC)

Unsourced MacBeth reference deleted from article, August 2009. —Preceding unsigned comment added by 64.105.0.217 (talk) 19:05, 15 August 2009 (UTC)

Nice explanation of volatility -- & why it's often less today

Q: What does the term "triple witching hour" mean? ... In the early 1980's when organized futures and options exchanges began trading standardized contracts based on stock indices, that final value of those indices for cash-settlement purposes was usually the close of trading on the third Friday of the month. Every month there is an expiration on options and options on the futures. But expiration of the futures, where a large proportion of the arbitrage activity takes place, only occurs once a quarter. So on the third Friday of the last month of each quarter, stock exchanges would be deluged with orders to buy or sell huge quantities of stock at exactly the closing price used for cash-settling the derivatives contracts. This combined expiration of options, futures and options on futures came to be known as the Triple Witching Hour.

Because these arbitrage strategies were market-neutral, simply taking advantage of price discrepancies between the index and derivatives on the index, they didn't represent any real opinion on the market's direction. But unwinding only one side of the strategy with a market order and letting the other side cash-settle sometimes caused huge gyrations in the markets during the final hour of trading on the third Friday of that month.

Eventually, many of these expiring contracts switched from using Friday's closing price to using the opening price or trading range for each of the component stocks in determining their settlement values. This lessened the pressure for immediate execution at any price, and allowed the possibility of delayed openings for order imbalances at exchanges that have such procedures in place. So while the triple expiration of options, futures and options on futures can still have an impact on how the market opens on that day, the kinds of gyrations that routinely occurred in those early days is rarely observed today.

http://www.888options.com/

—Preceding unsigned comment added by 66.167.95.138 (talk) 20:45, 14 August 2009 (UTC)

Triple & Quadruple witching hour explained & distinguished

Brokers generally understand these terms to refer to extra volatility in the final hour of the third Friday of the month (or the last hour of the last trading day before the third Friday if the third Friday is a holiday). Volatility may be even higher on the third Friday of the quarter where additional futures contracts (SSFs) expire. These terms are imprecise, in that "witching hour," "triple witching" hour and "quadruple witching hour are used informally and almost interchangeably for third Friday volatility.

... “quadruple witching hours!”

What sounds like a line from a cheap horror movie is actually a warning you are likely to hear four times a year when four speculative derivatives all expire on the same Friday.

The event happens on the third Friday in March, June, September and December when options, index options, single stock futures and index futures all expire on the same date. http://stocks.about.com/od/advancedtrading/a/0911triplewitch.htm

quadruple witching hour

Definition

The final hour of the stock market trading session on the third Friday of March, June, September, and December, when in addition to the expiration of option contracts and futures contracts, which indicates a triple witching hour, the expiration of single stock futures (SSFs) also occurs. http://www.investorwords.com/6894/quadruple_witching_hour.html

No MacBeth. —Preceding unsigned comment added by 64.105.0.217 (talk) 18:22, 15 August 2009 (UTC)

Do Single Stock Futures still expire only quarterly? Or is it every month?

I see options on single stocks available that expire in every month, not just in the last month of each quarter. Does a "Quadruple Witching Hour" now occur every month, but is called a "Triple Witching Hour" by tradition? Does the last hour matter less than it did because it is now the price at the open on that third Friday (or the last trading day before if the third Friday is a trading holiday that sets the price for closing the options that expire that Saturday (or on Friday, if Friday is a trading holiday)?

Perhaps an expert is needed to sort this through?