Triple Witching Hour occurs four times a year, on the
third Friday of
March,
June,
September, and
December.
It occurs when the contracts for stock index
futures, stock index
options and stock
options all expire on the same day. It is sometimes referred to as "
Freaky Friday".
The final trading hour for that Friday is the hour known as triple witching. In this
final hour the markets are quite volatile as traders quickly offset their option/futures order before the closing bell. If you are a long-term
investor, triple witching has
minimal impact.
Moments of
extreme volatility on these days were common in the 1980's, but a series of changes in
market structure, changes in the timing of expiration and settlement, and, most importantly, broader dissemination of information have largely diffused this
phenomenon.