Been trading for a while but keep hearing about quad witching days affecting market volatility.
What exactly happens during these sessions and how do you adjust your positions? Notice weird price action sometimes but never connected it to options expiry.
Quad witching hits four times a year - third Friday of March, June, September, and December. That’s when stock options, index options, stock futures, and index futures all expire together.
Volume goes nuts in the last hour. I’ve seen crazy moves in EUR/USD and GBP/USD when the S&P starts jumping around during these sessions.
I tighten stops and skip new trades after 3 PM EST on quad witching days. The volatility looks good but it’s mostly just institutions rebalancing - pure noise.
December 20th is the next one. Expect extra chop in anything connected to US markets.
Quad witching can lead to big swings. I prefer to stay light and look for stability once the dust settles.
Avoid new trades late stay safe from the noise.