Friday, March 17, 2017

Stock Experience Quadruple Witch Today

News
The last month of every quarter, in March, June, September, and December, and refers to the simultaneous expiration of options and futures tied to individual stocks and stock-indexes. It's called Quadruple Witch, possibly because it sound cool or or it's loose history of spooking the market over the short-term. JPMorgan's equity derivatives team suggests that $1.4 trillion notional of S&P 500 options expires Friday. That's a lot of money to move. Some fear this will negatively impact stocks as volatility rises.

I say, ignore it. It's sell headlines and fear. The stock rally, largely driven by international safe haven capital flows, won't alter their buying plans because of triple witch. They likely aren't even following it. If US stock take out the March 1st high, an outcome that the majority has been convinced won't likely happen, it could easily propel the market to a June high.

Headline: Does quadruple witching day still spook the stock market?

It is so-called quadruple witching day, but it may not be as frightful as it sounds. The spooky-sounding term occurs on the third Friday of the last month of every quarter, in March, June, September, and December, and refers to the simultaneous expiration of options and futures tied to individual stocks and stock-indexes.

The four-pronged expiration event for options, which grant investors the right but not the obligation to buy an underlying asset at a given price and time, and futures has instilled a certain degree of trepidation in Wall Street.


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