It’s Triple Witching Friday

“Triple Witching Friday is an event that occurs when the contracts for the stock index futures, stock index options and stock options all expire on the same day,” Golden Hammer writes for Seeking Alpha. “Triple witching days happen four times a year on the third Friday of March, June, September and December. It just so happens that today is that day.”

“Today I expect to see large volumes of buying and/or selling as investors try to cover their open positions,” Hammer writes. “I expect those who sold the naked calls to take large short positions this morning in an attempt to drive the prices lower before covering. This typically can allow for 2%-3% swings on a day like today.”

Hammer writes, “I expect all of the indexes to open approximately 1% lower tomorrow as the shorts begin to initiate their positions. Given the extreme caution surrounding this fiscal cliff, I doubt the bulls will have enough positive momentum to beat out the bears early in the day. I do believe however we can expect to see a sharp rise going into the final hour before the market closes. I base this option on the fact that next week holds potential for both a “Santa Claus rally week” as well as a possible cliff resolution. This would grant those who are willing to hold out a very happy new year.”

Read more in the full article here.

MacDailyNews Take: And, rumors of today’s apocalypse were greatly exaggerated.

22 Comments

  1. “Today I expect to see large volumes of buying and/or selling…”

    No, really? Buying and/or selling? Wow- that MUST have been a tough call! Man, these guys are awesome! I mean, who would have thought that there would be buying AND/OR selling? On the stock market, no less? Go figure…

    BTW, if the world is ending, selling won’t help you. Just sayin’…

    1. Do not criticize what you obviously do not understand.

      “Large” is the differentiating term here that distinguishes it from average volume. Volume surges are meaningful to those who understand even the basics of investing.

      Your post is timestamped AFTER the time that the “end of the world” was speculated by some of your like-minded friends to have happened, so your “just sayin'” advice is meaningless.

      1. Your post is timestamped AFTER the time that the “end of the world” was speculated by some of your like-minded friends to have happened, so your “just sayin’” advice is meaningless.

        About as meaningless as your kind picketing funerals with trashy signs?

    2. Macman: I enjoyed your comment, laughter is good medicine for my soul and you gave me some. I’m guessing you were just having fun, not to be taken seriously as others have taken you here. If I am wrong, then the key to what you’ve overlooked is the “LARGE VOLUMES” of buying and/or selling. I found this article as it was first on the returns of my google search on triple witching. I had been going thru my returns of a stock screening program for Friday and found a significant %age of stocks with a large volume spike but also a large price bar, in the negative direction, which then finishing right back where they started,. Made me suspect a triple witching Fri, which I found indeed had occurred. I looked at the market indices’ plots (Dow, S&P, NASDAQ, NYSE, etc.) and found the same huge volume spike but without the large price bar. Article prediction was correct!

  2. “And, rumors of today’s apocalypse were greatly exaggerated.”

    Hey, the day ain’t over yet. The Mayans didn’t specify a time-of-day so it can happen at any time.

  3. Meh, the author implies Triple Witching is all-day phenomenon when in fact Freaky Friday occurs in the final hour of the trading day when everyone is asshole to elbow yelling as loud as they can with hand and arm signals.

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