A witching day is when multiple types of financial contracts expire simultaneously, causing chaos and volatility in the market. A double, triple, or quadruple witchcraft day involves the expiration of two, three, or four types of contracts. Halloween is the third Friday of March, June, September, and December, and is often used to describe especially volatile witching days. Traders can profit or experience losses depending on their ability to predict market direction and react quickly. The origin of the term “Halloween” is unclear.
In the financial world, a bad day is one when contracts for multiple types of options or futures expire on the same day. As many contracts are executed on a quarterly basis, it is common for several classes of financial contracts to expire simultaneously, which can result in chaos on the trading floor. A witching day is characterized by extremely volatile markets, with traders trying to assess their situations and improve them before the magical period ends.
On a mediocre day, stock index options and stock options, along with stock index futures and single stock futures can expire. When two of them expire on the same day, it is known as a double witchcraft day. A triple day of witchcraft involves the expiration of three, while a quadruple day of witchcraft encompasses all four. The last hour of trading on a witching day can be known as a witching hour because it is usually quite chaotic and sometimes a little desperate.
Halloween takes place on the third Friday of March, June, September and December. While the term “Halloween” is mostly used in the world of finance, it is sometimes thrown around by the media and the general population, especially when a witching day involves especially volatile trade. People reporting specific commodities may also discuss witching days, explaining wild price fluctuations and behavior that may seem erratic to people unfamiliar with the concept of witching days.
Someone who plays right-handed can profit on a witching day, especially if he is good at predicting which direction the market will go. In other cases, people may experience a loss because they move too slowly or fail to anticipate an event. Beginning traders especially can struggle on a witching day, because events happen so quickly, and traders are notorious for their brutality to new members of the herd. Failing to follow up or soiling trades can be especially dangerous on a volatile trading day, as some new traders learn to their chagrin.
The origins of the term “Halloween” are a bit murky. Some people suggest that since triple days of witchcraft were once the most common type, the term may be a reference to the three witches in Shakespeare’s Macbeth. This financial jargon could also simply reference the feeling that a witching day is like a magical, almost surreal time as traders struggle to get the upper hand to set themselves up for another quarter of successful trading. It could also be a retroactive “witching hour” formation, a term commonly used to describe a brief window of opportunity.
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