What is triple-witching?

Triple-witching means the quarterly expiration of index futures, the stock index options and stock options that are expiring on the same day. This usually happens four times a year on the third Friday of March, June, September, December. This term is also used as “freaky Friday” . The triple witching causes serious swings in the market prices, though long term investors are mostly immune to these market changes. For an example investors might think that upcoming contracts are too expensive so they start buying up the company’s underlying shares. This act adds a buying pressure to the stock price and if there isn’t any other movement that day then the price can spike really fast. Though in recent years many investors unwind positions so the effect is dampened.