Triple Witching is a term used to describe the simultaneous expiration of stock options, stock index options, and stock index futures contracts on the third Friday of March, June, September, and December. This occurs on the last hour of trading of the stock market. The term "witching" is used to describe the expiration of these contracts, as it is thought to create volatility and unpredictability in the markets, similar to a witches' brew.During triple witching hours, the increased trading volume can lead to increased volatility and sharp price movements in the stock market. This is because many traders and investors are adjusting or closing out their option and futures positions, which can cause large amounts of buying and selling in the stock market. This increased volatility can be beneficial for short-term traders who look to take advantage of the price movements, but it can also be risky for long-term investors who may see the value of their holdings fluctuate significantly.It is important to keep an eye on the stock market during these hours and be prepared for increased volatility. Traders and investors may want to adjust their trading strategies accordingly, such as by using stop-loss orders or by avoiding taking large positions in the market during this time. Additionally, it's worth to keep in mind that this event occurs only four times a year and the impact on the market could vary depending on the market conditions and the stocks.
