This coming Friday is quadruple witching options expiration. This event occurs just four times a year on the third Friday of every March, June, September and December. Quadruple witching is a time when almost every option under the sun will expire. Options contracts for stock index futures, stock index options, stock options, and single stock futures all expire during Quadruple witching. This is a period when the major stock indexes will be extremely volatile. Traders should expect to hear a lot of rumors and ridiculous upgrades and downgrades during this week.
This is a time when there will be a lot of game playing by the large institutions as they try and shake out the small retail options trader playing the near term expiration. You see the small retail options traders will usually just buy a put or call option to try and capture a gain in the premium paid for the option. Rarely, if ever will the small retail options trader exercise an option. The big institutions know this and will usually just bet against the majority of the small retail options trader. I call this time of the month the real shark week as the retail options trader gets eaten alive by the institutional traders.
Some stocks that usually have extreme volatility during this week include Netflix Inc (NASDAQ:NFLX), First Solar Inc (NASDAQ:FSLR), Green Mountain Coffee Roaster Inc (NASDAQ:GMCR), and even Dendreon Corp (NASDAQ:DNDN) just to name a few. Individual traders should always be on guard during this volatile period.
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Shark Week Is Back
Published 06/14/2012, 02:32 AM
Updated 07/09/2023, 06:31 AM
Shark Week Is Back
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Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
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